Product details

iGATE Corporation (iGATE) snapped up an 84% stake in Patni Computer Systems (Patni), which also included 45.6% from the three founders of Patni ,17.4% from private equity firm General Atlantic and an open offer for an additional 20.6% from Patni''s public shareholders. The buyout was expected to put iGATE in the list of top-tier IT players globally. The deal was signed with an aim to synergise the leadership team of both iGATE and Patni to create an integrated leadership team which could drive the combined company to newer horizons. Considered as one of the biggest acquisitions involving an Indian IT company, the deal not only gave iGATE scale in the IT services business, but also ended uncertainty about the future of Patni, one of India''s oldest IT services companies. Apart from synergies, iGATE''s acquisition of Patni gave rise to certain challenges such as integration of the companies, retention and attrition issues as well as branding issues. While some industry observers were optimistic about the deal, others had apprehensions about its success. Analysts were skeptical that while the transaction could give both the mid-sized companies a way out of being stuck where they were, it was also likely that they might get stuck at their new size unless they radically changed the way they did business. Taking the pros and cons of the deal into consideration, the case tries to look into the various aspects of the deal, the synergies and challenges that arise from the acquisition and the future of the two companies. Whether iGATE and Patni''s strengths could help the combined entity in carving out a strong position in India and abroad remained a big question. In what way iGATE could capitalise and integrate the business of Patni Computers in order to take advantage of its size and scale were among other questions that remained unanswered.