IT
services company Igate is going to delist from the Nasdaq less than a
month after French major Capgemini agreed to acquire it in a $4.04-bn
deal.
The US-based company, with most of its workforce in India, said it will apply for termination of registration of the company common stock under the Exchange Act after the merger and will cease to make filings with the US Securities and Exchange Commission (SEC).
The merger is expected to take place during the third quarter of this calendar year. Igate retained BofA Merrill Lynch as financial advisers, who informed the company's board of directors that Capgemini had confirmed an all-cash offer price of $48, despite certain negative findings in due diligence, but proposed a termination fee of 4% of equity value.
TOI was the first to report on the acquisition, and the possibility of Capgemini taking Igate private in its April 23 edition.After delisting, Igate will become a subsidiary of Capgemini North America. Igate will cease to exist as a publicly traded company after nearly two decades of having gone public in 1997.
Founded by two Indian-Americans - Sunil Wadhwani and Ashok Trivedi - Igate was born under a different name Mastech. In 2000, during the dotcom boom, the founders rechristened Mastech as Igate and followed it up with business model changes to become a $1.2-billion IT services firm with 33,000 employees.
"Under the terms of the merger agreement, the company's shareholder would receive $48 per share which is 22% premium over the closing price of shares of company common stock on February 19, 2015, the last trading day before our board of directors received Capgemini's initial indication of interest," the company said in a recent filing with the SEC.
The merger consideration will be paid in cash. Shareholders would not have equity interest in parent company.
Capgemini said it will buy the 25% stake held by the two founders, and the 29% stake held by Apax Partners, which financed the Patni acquisition. The founders get $1 billion, and Apax, which had invested $380 million, will take home around $1.2 billion.
Capgemini and Igate together will have 12.5 billion euros in revenue this year, an operating margin of 10% and 1.9 lakh employees. Capgemini gets 70% of its revenues from Europe, unlike most global IT services companies that get much of their revenue from the US, the world's biggest outsourcing market.
The US-based company, with most of its workforce in India, said it will apply for termination of registration of the company common stock under the Exchange Act after the merger and will cease to make filings with the US Securities and Exchange Commission (SEC).
The merger is expected to take place during the third quarter of this calendar year. Igate retained BofA Merrill Lynch as financial advisers, who informed the company's board of directors that Capgemini had confirmed an all-cash offer price of $48, despite certain negative findings in due diligence, but proposed a termination fee of 4% of equity value.
TOI was the first to report on the acquisition, and the possibility of Capgemini taking Igate private in its April 23 edition.After delisting, Igate will become a subsidiary of Capgemini North America. Igate will cease to exist as a publicly traded company after nearly two decades of having gone public in 1997.
Founded by two Indian-Americans - Sunil Wadhwani and Ashok Trivedi - Igate was born under a different name Mastech. In 2000, during the dotcom boom, the founders rechristened Mastech as Igate and followed it up with business model changes to become a $1.2-billion IT services firm with 33,000 employees.
"Under the terms of the merger agreement, the company's shareholder would receive $48 per share which is 22% premium over the closing price of shares of company common stock on February 19, 2015, the last trading day before our board of directors received Capgemini's initial indication of interest," the company said in a recent filing with the SEC.
The merger consideration will be paid in cash. Shareholders would not have equity interest in parent company.
Capgemini said it will buy the 25% stake held by the two founders, and the 29% stake held by Apax Partners, which financed the Patni acquisition. The founders get $1 billion, and Apax, which had invested $380 million, will take home around $1.2 billion.
Capgemini and Igate together will have 12.5 billion euros in revenue this year, an operating margin of 10% and 1.9 lakh employees. Capgemini gets 70% of its revenues from Europe, unlike most global IT services companies that get much of their revenue from the US, the world's biggest outsourcing market.
No comments:
Post a Comment