Soon after announcing the deal to buy Patni Computer Systems Ltd, Phaneesh Murthy, chief executive officer (CEO) of iGate Corp., spoke to Mint on the rationale for the deal. Edited excerpts:
Was this just about scale?
It was important to get a seat at the table, but this is only partly about scale. Beyond a point, I believe scale is not enough. There will always be someone bigger than you, like an IBM for example. So it also has to be about differentiated offerings in verticals. While we are strong in the banking and financial services sector, Patni is strong in verticals like insurance and manufacturing.
Road ahead: iGate’s chief executive officer Phaneesh Murthy. Aniruddha Chowdhury/Mint
Will you consider a joint or co-CEO model?
No. On the senior leadership in Patni, we will have to work out the roles, and take a call as and when it comes. Acquisitions in the services space is primarily about people. The investment thesis is that we are doing this because we want the people and the customers.
But won’t some restructuring be required organizationally, considering that many functions will be duplicated?
The way I am looking at that is, some people will be good at A, and at B, and instead of A they can start doing B. So, I don’t see any real issues in restructuring.
Though this is a huge buy and you will take a while digesting it, are you looking at other companies with a “for sale” sign?
Not at all. I am basically a conservative, middle-class south Indian Brahmin. As it is, we don’t like debt, and I am very uncomfortable with a $700 million (around Rs 3,180 crore) debt.
What does it take to close a deal like this? What were the highs and lows?
I’ll tell you what it takes—90 days of talking only to bankers, lawyers and tax planners. It is a relief not to be doing that now. There were always some clauses and terms coming up for discussion. There were enough times in this transaction when everybody thought it was all done, and something would come up. That is what happened last week. Those were the lows. As for the highs, just think—no one in the competition could reach a structure that worked.
You said in your conference that you are ready to “kick butt” in the marketplace. Looking back on your journey over the last few years, is there a feeling of redemption?
Not at all. This is not about individual egos at all. It is about a company with aspirations, wanting to compete better. We wanted a seat at the high table, and now, yes, we are looking to kick butt in the marketplace.