iGate board meet next week to mull Patni integration

The board of iGate is likely to integrate Patni Computers in its meeting next week, reports CNBC-TV18's Kritika Saxena quoting sources. It is learnt that the meeting will also chalk the road ahead post the Patni open offer. iGate's open offer for buying 20% stake in Patni Computer Systems which closed yesterday was fully subscribed.

Also on the agenda will options to delist or offload excess stake.

iGate acquired a 63% stake in Patni Computers, by paying USD 921 million to its four promoters. An open offer to the public shareholders of Patni for another 20% stake will take the total cost of the acquisition to USD 1.2 billion.

With revenues of close to a billion dollars (USD 940 million annualized as of September 30, 2010) and a total workforce of 25,000, the iGate-Patni combine will become the country's tenth largest IT services operation by size.

To finance the deal, iGate will take on debt of USD 750 million but with the combined operating cash flow of about USD 185 million per year, debt servicing should not be an issue.