iGate’s Acquisition of Patni : Important Points

Posted In Events, India, World - By NitiN Kumar Jain On Tuesday, January 11th, 2011 With 1 Comment






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US based iGate’s acquisition of India based Patni Computers is the acquisition of the century so far. I know, it is already in the news but just wanted to share few important bullet points about the acquisition that might be of interest to you as an employee of iGate or Patni Computers or anyone who seek interest in the acquisition.

  • iGate has acquired 63 % stake in country’s sixth largest IT firm Patni Computer Systems
  • The deal is worth $1.22 billion
  • iGate will buy 45.6 % of the shares of the three founders of Patni.
  • Rest 17.4 % stake, they are buying from private equity firm General Atlantic.
  • The mandatory 20 % open offer is to be made to the public shareholders of Patni.
  • Patni Computers was founded by 3 brothers Narendra Patni, Gajendra Patni and Ashok Patni in the year 1978.
  • iGate was founded in 1996, 18 years after Patni Computers came into existence.
  • Shares of Patni Computer jumped up 1.46 % to Rs 466.80, on the Bombay Stock Exchange after the news broke.
  • On the other side, iGate tumbled 11 % in U.S. trading market after the news.
  • iGate’s offer values Patni at 11.8 times the company’s earnings.
  • iGate’s statement “Get Bigger, Sooner” after the acquisition has invited a lot of criticism in the service industry by senior analysts saying “If you don’t get bigger, sooner, you’re going to get smaller, more faster“.
  • Patni’s employee attrition is expected to increase after the acquisition.
  • Patni will embrace the new branding “iGate” after the acquisition process is over.
  • Patni is expected to remain listed in India for at least until the first half of 2012. Nasdaq is the main emphasis of iGate’s strategy.
  • The combined employee base of the entity will now become more than 24,000 of which more than 15,000 only belongs to Patni Computers.
  • iGate’s current CEO, Mr. Phaneesh Murthy, worked with Indian IT giant Infosys before being hit out over a sex suit.
  • Infosys co-founder, Mr. N. R. Narayana Murthy, worked with Patni Computers in his initial days before he founded Infosys.

Please respond with your comments in case you wish to add anything to the list or feels anything enlisted above makes no sense.