India's club of $1 billion-plus information technology and IT-enabled services companies got a new member, with iGate's $1.2 billion acquisition of Patni Computer Systems . iGate, less than half Patni's size, has offered to pay 503.5 per share to buy a 63% stake in Patni, backed by equity from private equity and loans from foreign lenders.
The acquisition will end ownership woes in Patni and help the company build its pipeline in the banking and financial services vertical, in which iGate earns a large chunk of its revenues.
Consolidation in the mid-size IT space began in 2008, when MindTree acquired Aztecsoft to boost its outsourced product development. In 2009, the IT sector reportedly saw close to 92 M&A deals largely in the small and mid-sized IT space. The number rose to 115 in 2010.
The trend will intensify in the post recession period as financial mergers and acquisitions in the West have resulted in substantial additional business in the financial software vertical. The demand from retailers has also been strong, though demand from manufacturing is still weak
No comments:
Post a Comment