IGate has geared up to buy the nation’s sixth biggest software exporter, Patni Computer Systems with a deal of $1-billion. Consequent to reaching an understanding with its promoters on the controversial issue of a non-compete provision, IGate is set to acquire Patni Computer Systems.
Since 2007, lot of efforts was made by private equity firm General Atlantic and promoters to sell their share in Patni Computer Systems.
Excluding some minor terms and conditions and share purchase agreement which are yet to be signed, the deal is complete as said by one person having sound knowledge of the deal. To advance further in the deal, the board of two parties is anticipated to meet next week.
The acquisition of Patni Computer Systems is one of the biggest acquisitions by an Indian software firm, larger than the Mahindra’s acquirement of Satyam Computer Services. According to a close source, iGate and the promoters were able to land up in a commonly satisfactory clarification on the non-compete.
When Ashok Patni, one of the three Patni brothers, and Phaneesh Murthy, owner of IGate, were contacted they declined to comment. He had assessed a proposal for the fraud-hit Satyam Computer Services but gradually made his mind not to assess because of the insecurity of Satyam’s funds.
Patni brothers are being advised by Avendus, Ambit and Credit Suisse in the deal. On Monday, Patni shares on the BSE finished at Rs 486.40. Past attempts to sell stake in Patni failed due to a huge gap between the price expectations of Patni brothers and prospective buyers. The other reason was discrepancy between Patni brothers.
