US software firm iGate, backed by private equity firm Apax Partners, has agreed to acquire a majority stake in Patni Computer for USD 862 million, two sources with knowledge of the matter said, marking one of the largest deals in India's technology sector.
iGate and Apax have agreed to pay Rs 503.50 a share for a 63% stake in Patni, the sources said, adding that the price does not include fees for a non-compete clause in the agreement. Patni shares closed at Rs 460.10 in Friday trade on the Bombay Stock Exchange.
Apax will invest about USD 500 million in iGate for the acquisition. iGate will also take a loan of another USD 500 million from Standard Chartered and Deutsche Bank for the deal, the sources said.
iGate has agreed to make an open offer for an additional 20% to Patni's minority shareholders following the deal, the sources said.
The parties have signed off on the deal, and an announcement is expected to be made later on Monday, the sources said.
Patni's three founding brothers are selling their 46% stake, while private equity firm General Atlantic is selling its 17% holding, the sources said.
Patni, a mid-sized IT services company also listed in New York, provides technology outsourcing services to industries such as insurance, telecoms, utilities and retail.
Its clients include General Electric Co, Hitachi and Procter & Gamble Co's Gillette brand.
Commenting on the deal, Moshe Khatri of Cowen & Co said the biggest challenge will be in integration in Patni-iGate deal.
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