MUMBAI, INDIA: Putting an end to the speculations, the Patni Computer Systems Ltd today announced that its board has decided to sell majority stake in the company to U.S. software firm iGate, backed by private equity firm Apax Partners.
As per the 1.22 billion dollar deal iGate will pay Rs. 503.50 per equity share of Patni.
While iGate will buy approximately 43.6 per cent of the company on a fully diluted basis from the three founders of Patni — Narendra Patni, Gajendra Patni and Ashok Patni, the Phaneesh-Murthy led iGate will also buy a 16.6 per cent stake belonging to private equity firm General Atlantic.
Talking to reporters in Bangalore, Murthy said the transaction value could be as high as $1.22 billion, if the mandatory open offer of 20 per cent that iGate would have to make to remaining shareholders of Patni is fully subscribed.
With this acquisition the combined entity will be a billion dollar one.
“The combined Patni-iGate entity will be almost a billion dollar entity which is certainly a good size to have. In the IT service industry size and scale matters a lot to win large deals,” said Arup Roy, senior research analyst at Gartner.
The deal is one of the biggest acquisition in the Indian software industry and is expected to be completed in the first half of 2011, after acquiring all the regulatory approvals.
(With inputs from IANS)