iGATE, which initiated its move to acquire Patni Computer Systems in January this year, announced on Thursday that it has completed the process. Making the announcement in Bangalore, Phaneesh Murthy, iGATE CEO, said iGATE now holds 82.5 per cent stake in Patni.
Mr. Murthy, who has also been appointed CEO of Patni, said Patni's board has been revamped with nine members. He said the acquisition has been made with a debt of $770 million and a convertible preferential stock issue amounting to $330 million. He said the $370 million cash balances with the company are “enough for capital investments in the short and medium term.” The deal cost iGATE $1.25 billion.
Patni and iGATE would continue to be listed in India and in the New York Stock Exchange, Mr. Murthy said.
Mr. Murthy said the two entities would “go to market as a single entity, using our revenue synergies.” “Within the next three years we would like to be a leader in the banking and insurance and in the health verticals,” he said. The combined entity hopes to “be a significant player” in the media and entertainment, manufacturing, retail, logistics, communications, energy and utilities verticals in this time-frame.
Mr. Murthy also said the combined entity hoped to increase utilisation rates from the current “low 70s (per cent) to about 80 per cent by the end of the year. “We hope to contain attribution to about 20 per cent by the end of the year,” he added.
The two companies have 26,000 employees and have a combined client base of 360. The top ten clients contribute to about half the revenues of the combined entity. “The higher revenue base will enable us to attract larger clients,” Mr. Murthy said.
