iGATE buys 63 in Patni

India-s midcap IT company iGate Corporation has bought 63% stake in another midcap IT company Patni Computer Systems Ltd for around USD 1.2 billion. As per the offer, iGate had to make 20% open offer to Patni-s public shareholders to acquire shares from them. According to the deal iGate will buy 45.6% stake from the Patni promoters and 17.4 % stake (total 63%) from private equity firm General Atlantic at a price of Rs 503.50 per share for total USD 921 million. After that it will make an open offer to buy 20% from public shareholders for around USD 280 million. This is the biggest merger and acquisition deal in the Indian IT industry till now.

iGate will finance the deal through cash, debt and equity. It has only USD 120 million as cash reserves. After this deal, the combined entity-s yearly revenue will be close to USD 1 billion and will place iGate among the big Indian IT players. Both will be able to synergize their individual technology and clients after the merger.