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Case
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Reference no. 311-253-1
Published by: IBS Case Development Center
Published in: 2011

Abstract

The case study discusses how iGate Corporation (NASDAQ: IGTE), the United Sates-based IT and ITES company, acquired India’s sixth largest IT services and business solution provider, Patni Computer Systems Limited, on January 10, 2011. The size of the deal was US$1.22 billion, which made it the second largest deal in the Indian IT space. The deal was interesting as Patni was two and half times bigger than iGate and iGate had taken a debt of around US$ 700 million to finance it. This acquisition created a 'Tier-I' IT player with revenues of US$ 1 billion and a 25,000 human force. However, an acquisition brings with it its own challenges and the iGate management has to overcome these in order to make the acquisition successful. The case will help the students to: 1) Understand the various issues and challenges in merger and acquisition (M&A); 2) Understand the synergies and challenges of the acquisition; 3) Understand the various financing methods of any acquisitions; 4) Understand the rationale behind the acquisition; 5) Understand the human resource issues involved in any acquisition of an IT company; 6) Understand the role of various parties involved in M&A activities. The case is meant for MBA/MS level students as part of a merger and acquisition curriculum. The teaching note does not have an analysis of the case.

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Abstract

The case study discusses how iGate Corporation (NASDAQ: IGTE), the United Sates-based IT and ITES company, acquired India’s sixth largest IT services and business solution provider, Patni Computer Systems Limited, on January 10, 2011. The size of the deal was US$1.22 billion, which made it the second largest deal in the Indian IT space. The deal was interesting as Patni was two and half times bigger than iGate and iGate had taken a debt of around US$ 700 million to finance it. This acquisition created a 'Tier-I' IT player with revenues of US$ 1 billion and a 25,000 human force. However, an acquisition brings with it its own challenges and the iGate management has to overcome these in order to make the acquisition successful. The case will help the students to: 1) Understand the various issues and challenges in merger and acquisition (M&A); 2) Understand the synergies and challenges of the acquisition; 3) Understand the various financing methods of any acquisitions; 4) Understand the rationale behind the acquisition; 5) Understand the human resource issues involved in any acquisition of an IT company; 6) Understand the role of various parties involved in M&A activities. The case is meant for MBA/MS level students as part of a merger and acquisition curriculum. The teaching note does not have an analysis of the case.

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