Bangalore: A consortium of US-based software-firm iGate Corporation and private equity firm Apax Partners announced on Monday that it entered into a deal to buy a 63% stake in Mumbai-based Patni Computer Systems Ltd. at Rs 503.5 a share.
The total value of the deal, including an open offer of 20% that will follow later, will be about $1.22 billion. The combined entity will have a revenue of over $1 billion and 25,000 employees.
“The transaction, including the tender, will complete in the first half of 2012,” said iGate CEO Phaneesh Murthy, speaking at the press conference.
“Patni will continue as a publicly listed company significantly beyond first half of 2011 with iGate as a majority stakeholder. It is hard to spell out the roadmap of the deal beyond this because it involves many regulatory approvals,” said Murthy.
iGate will raise money for the deal through a mixture of equity and debt. Apax Partners will pick up a minority stake in iGate by subscribing to a preferential issue of between $270 and $480 million.
In addition, iGate will raise debt of $700 million and have access to a revolving line of credit of about $50 mn from Royal Bank of Canada and Jefferie’s & Company. The company has at least $100 million of cash on its books to complete the deal, one of the investment bankers involved in the deal told Mint earlier.
Shares of Patni were up 1.47% at Rs 466.85 on the BSE after the announcement, at a time the Sensex was trading down 1.72% at 19354.08.