Capgemini to buyout iGate for $4 billion
NASDAQ listed iGate would consolidate the North American presence of French IT major Capgemini. The deal is finalized at $4.04 billion in cash; Capgemini to offer $48 for each iGate share. This will be the 10th biggest buyout of a US based tech firm by a European company. Capgemini would gain clients such as Royal Bank of Canada and General Electric Co.
What is iGate?
iGate’s initial footprints
iGate made news in 2011 when it acquired India-based Patni Computer Systems, which was thrice its size. The company also changed its name to iGate Patni for a brief period.
iGate offered Rs. 520 per share to Patni shareholders to delist the company from Indian stock exchanges and consolidate its US shareholding. The price was reached by the reverse book building process at BSE. iGate held 82% stake in Patni after a $1.2 billion buyout. iGate paid Rs. 503 per share while acquiring Patni computers.
Phaneesh Murthy sacked on sexual harassment charges
iGate board sacked CEO Phaneesh Murthy after legal investigations of charges levied by a subordinate employee. He faced similar consequence in 2002, when he had to leave Infosys after an American employee accused him of sexual harassment. He played a major hand in converting iGate into a billion dollar company before his unceremonious exit.
Ashok Vemuri joins iGate as CEO and President
He took over from Phaneesh Murthy. Vemuri was earlier working at Infosys as 'Head of Americas and Global Head of Manufacturing and Engineering'. Gerhard Watzinger, who served as the interim President and CEO after Murthy's exit, stayed on in an advisory role to ensure a smooth transition.
Atos and Capgemini eyeing iGate
The talks have been taking place through Apax Partners who own the biggest share in iGate and are keen on exiting. Apax lent $480 million to iGate at the time of the Patni acquisition. Apax holds 29% shares in the company, as compared to 25% shares of the founders, Ashok Trivedi and Sunil Wadhwani.