A few days back it was reported that two French IT services companies Capgemini and Atos were reportedly in a race to acquire the Indian IT services company, Igate. The news is now doing the rounds that Capgemini is quite likely to make the acquisition.
The market capitalization of Igate stands at around $3.6B and speculations are rife that if the acquisition happens it is going to be one of the biggest in the IT services landscape.
Apax Partners, the private equity firm that funded a significant portion of Igate’s $1.2B acquisition of Patni Computer Systems in 2011, is now on the verge of exit. This triggered the news of Igate’s buyout, making it an interesting buying target for some growth-hungry IT companies. Apax has converted its debt in the company into equity and holds around 30% stake, while Igate founders together hold around 25%. So, the acquiring company will be looking at grabbing about 55% of stake in the company.
Capgemini is reportedly looking at expanding its offshore presence and Igate’s offshore footprint and healthy portfolio mix of IT services and BPO makes it an attractive target. Atos is also reportedly looking at strengthening its ADM business.
Who wins the race for Igate acquisition remains to be seen.