Apax-backed iGate plans to take Patni private
Apax Partners-owned iGate plans to buyout Patni Computer Systems’ minority shareholders and delist the company from the Bombay Stock Exchange, National Stock Exchange of India and the New York Stock Exchange. The purchase will be funded through a debt facility of about $215 million.
iGate's starting offer is INR356.74 per share, which means the privatization will cost at least $151 million, The Wall Street Journal reported. This represents an 8.2% discount to Patni's closing price last Wednesday - the day the offer was announced - and is also well short of the INR505.50 iGate paid when it bought a majority stake in the company in January. Analysts said that shareholders wouldn't be happy with the offer.
The delisting offer is subject to shareholder and regulatory approval, and will be done through a reverse book-building process, iGate said in a statement. It expects the deal to be completed by mid-2012.
Apax Partners and iGate acquired 63% of Patni from the company founders and General Atlantic for $921 million. The agreement included an option for the consortium to take an additional 20.6% for $301 million. Of the 63% sold, 17.4% was held by General Atlantic and the remainder by the company founders. The private equity firm invested $100 million in Patni in 2002, but exited with over 2.5x that amount.
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