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Before French IT giant <keyword id="10863" type="COMPANY" weightage="80" keywordseo="CapGemini">Capgemini</keyword> could acquire <keyword id="20356" type="CITY" weightage="80" keywordseo="igate">IGATE</keyword>, the US-based company sold off its domestic infrastructure management services (IMS) operations to India’s <keyword id="2879848" type="UNKNOWN" weightage="80" keywordseo="MindSquare-Technologies">MindSquare Technologies</keyword> for about $5 million. 
 

	Under the agreement, MindSquare has acquired the entire Indian customer base of IGATE, along with its over 400 employees that provide remote and onsite IMS services to Indian customers of the US-based firm, as per a PTI report. 
	 

	MindSquare Technologies is a group company of Mumbai-based 1neoteric Technology Solutions. "Apart from the capability of offering end-to-end customer solutions, the deal has also helped us bring on board marque customers," <keyword id="2879846" type="UNKNOWN" weightage="80" keywordseo="Neoteric-Technology">Neoteric Technology</keyword> Solutions Head Anup Nair told PTI. These customers include <keyword id="6355199" type="CITY" weightage="80" keywordseo="Reliance-Industries">Reliance Industries</keyword>, Reliance Infrastructure, <keyword id="46907" type="CITY" weightage="80" keywordseo="Reliance-communications">Reliance Communications</keyword>, Castrol India, <keyword id="712657" type="PERSON" weightage="80" keywordseo="Anand-Bazar-Patrika">Anand Bazar Patrika</keyword>, BITS Pilani and <keyword id="6359595" type="ORGANIZATION" weightage="80" keywordseo="British-Council">British Council</keyword>. 
	 

	Though Nair did not tell anything about the deal size, sources said the deal is estimated to be worth about $5 million financed through internal accruals. Merisis Advisors advised <keyword id="912199" type="UNKNOWN" weightage="80" keywordseo="neoteric">Neoteric</keyword> on the acquisition. On April 27, Capgemini said it will buy Nasdaq-listed IGATE for $4.04 billion (Rs 25,000 crore) in cash. IGATE had bought India's <keyword id="110387" type="CITY" weightage="60" keywordseo="Patni-Computer-Systems">Patni Computer Systems</keyword> in 2011 in partnership with private equity giant <keyword id="218609" type="COMPANY" weightage="80" keywordseo="Apax-Partners">Apax Partners</keyword> in a $1.2 billion deal. 
	 

	Set up in 2012 by industry veterans Balakumar Vijayendran, Sanjay Nayak and Vaishali Bansal, MindSquare offers a range of managed infrastructure services. Earlier this year, it received a strategic investment from 1neoteric and became part of the 1neoteric Group. 

	 
	(Image: Indiatimes)

IGATE sells domestic IMS for $5 million to MindSquare Technologies

<keyword id="10863" type="COMPANY" weightage="80" keywordseo="CapGemini">Capgemini</keyword> announced yesterday that it would acquire <keyword id="20356" type="CITY" weightage="80" keywordseo="igate">IGate</keyword> for a whopping $4.04bn. A lot of you must have been wondering, where and to whom does all this money go to? In fact, some of you must have also wondered how one arrives at this mind boggling amount! Well, the company’s valuation based on its market capex aside, we at Business Insider have put together a list of names who will benefit the most from this deal. 
 
We have created a list of 9 people, entities, who will pocket several millions just by way of shareholding, which will give you a fair idea into how ne arrives at the $4 bn deal figure. 
 
<keyword id="218609" type="COMPANY" weightage="80" keywordseo="Apax-Partners">Apax Partners</keyword>, PE Firm, and largest stakeholder: $1.1 bn from 2,33,84,095 shares 
 
<keyword id="1042242" type="PERSON" weightage="80" keywordseo="Sunil-Wadhwani">Sunil Wadhwani</keyword>, Founder: $504.2mn from 1,05,06,075 shares 
 
<keyword id="1042241" type="UNKNOWN" weightage="80" keywordseo="Ashok-Trivedi">Ashok Trivedi</keyword>, Founder: $497.2mn from 1,03,59,175 shares 
 
<keyword id="376348" type="PERSON" weightage="60" keywordseo="Ashok-Vemuri">Ashok Vemuri</keyword>, CEO: $19.7mn from 4,00,000 shares 
 
Derek Kemp, EVP, Global Head Strategic Deals Team: $7.2mn from 1,50,000 shares 
 
Sanjay Tugnait, Head Americas: $7.2mn from 1,50,000 shares 
 
Sujit Sircar, CFO: $6.9 mn from 1,45,142 shares 
 
Srinivas Kandula, Global Head, HR: $6.9mn from 1,44,573 shares 
 
Satish Joshi, EVP and CTO: $6mn from 1,26,660 shares 
 
The IGate journey IGate was founded by Sunil Wadhwani and Ashok Trivedi in 1996. It went public on NASDAQ the very same year. Post a stellar few years of growth, IGate made a bid for its first major acquisition, acquiring majority stake in <keyword id="46908" type="COMPANY" weightage="80" keywordseo="patni-computers">Patni Computers</keyword> in 2011, delisting the firm a year later. Wadhwani and Trivedi roped in Apax Partners to complete the Patni acquisition, making the private equity firm a key stakeholder in the merged entity with 28.9% stake valued today at close to $1.5 bn. 
 
Given the strong growth momentum, it didn’t take long before IGate breached the $1bn revenue mark in 2012, soon after the Patni acquisition. Around May 2013, the company was riddled by an internal controversy that blew out of proportions and seriously threatened its reputation as a ‘well-governed’ company in the market. It was then that Phaneesh Murthy, its former CEO was fired over failure to disclose his personal relationship with a subordinate in the company. 
 
After several months of scouting, Wadhwani and Trivedi zeroed-in on Ashok Vemuri to takeover as IGate’s new CEO, in September 2013. Vemuri, then Infosys' board member who was also head of Americas besides chief of the manufacturing and engineering vertical, as president and chief executive officer, was known to harbour aspirations of taking over Infosys as its CEO. Once offered, Vemuri didn’t think twice before making the move. 
 
In fact, when Vemuri had quit Infosys, he was already one of the top contenders to become the firm’s first CEO, who wasn’t a co-founding member. Within the IT circuit it is said that Vemuri had had enough with the wait and watch game and decided to take on IGate’s offer almost as soon as it was made to him. 
 
In 2013, IGate also reached the $ 2bn market capex mark and completely reorganised the company in 2014 into vertical-based business units.

9 people who pocketed millions all because of the
Capgemini-IGate deal. Here’s how much each of them made

The fastest way to expand the existing business is by acquiring another company. And it appears that Europe's biggest IT services company <keyword id="10863" type="COMPANY" weightage="20" keywordseo="CapGemini">Capgemini</keyword> is likely to acquire NASDAQ-listed <keyword id="20356" type="CITY" weightage="20" keywordseo="igate">Igate</keyword>, which was founded by <keyword id="1042242" type="PERSON" weightage="20" keywordseo="Sunil-Wadhwani">Sunil Wadhwani</keyword> and <keyword id="1042241" type="UNKNOWN" weightage="20" keywordseo="Ashok-Trivedi">Ashok Trivedi</keyword>. This was revealed by multiple sources in a Times of India (TOI) report. 
 
According to the news daily, if the deal gets striked, it will be one of the biggest M&amp;As in the IT services arena. 
 
The TOI futher reported that in 2014, Igate had $1.27 billion as revenue. And now, its market capitalization stands at $3.6 billion. 
 The speculation about Igate being sold started soon after <keyword id="34499" type="POSITION" weightage="20" keywordseo="private-equity">private equity</keyword> giant Apax Partners, which financed much of Igate's $1.2-billion acquisition of <keyword id="46963" type="COMPANY" weightage="20" keywordseo="Patni-computer">Patni Computer</keyword> in 2011, converted its debt into equity four months ago to become Igate's largest shareholder in the company. 
 
Currently, Apax owns 29% stake in Igate, while Igate founders together hold 25% of the shares. According to the TOI report, Capgemini is looking at acquiring the 54% stake held by the promoters and Apax initially. However, it may later take Igate private by buying out the shares of other shareholders, sources told TOI. 
 Capgemini told TOI, "We do not comment on market rumours or speculation." Igate had not responded to queries at the time of going to print. There had been talk of French IT company <keyword id="327292" type="COMPANY" weightage="20" keywordseo="Atos">Atos</keyword> and <keyword id="6380915" type="COMPANY" weightage="20" keywordseo="BPO">BPO</keyword> <keyword id="6556311" type="POSITION" weightage="20" keywordseo="Major">major</keyword> <keyword id="25698" type="CITY" weightage="20" keywordseo="Genpact">Genpact</keyword> looking at acquiring Igate, but Capgemini is said to have nearly sealed the deal. 
 Peter Bendor Samuel, CEO of <keyword id="107837" type="CITY" weightage="20" keywordseo="Everest-Group">Everest Group</keyword>, said Igate would make an excellent acquisition for Capgemini. "Th<keyword id="267073" type="ORGANIZATION" weightage="20" keywordseo="EY">ey</keyword> are the right size to absorb, not too small so it does not move the dial, but not so big that they will struggle. Igate will be accretive to margins. Capgemini has a large net operating loss in the US from their failed acquisition of EY's consulting practice, and the large <keyword id="1472170" type="UNKNOWN" weightage="20" keywordseo="iGate-US">Igate US</keyword> presence will allow them to use it," he said. 
(Image:

Capgemini eyeing Igate?

Senapathy ‘Kris’ <keyword id="9991" type="PERSON" weightage="20" keywordseo="Gopalakrishnan">Gopalakrishnan</keyword> is a name that resonates with the growth of IT sector in India and the rise of <keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword>. ‘Kris’ as he is known popularly was the second last founder-CEO of the home-grown IT giant that spearheaded entrepreneurship in the field of digital transformation through internet technology. While Kris quit the company’s board in 2014, he is far from retired from work. As an ex-president of CII and also the non-executive chairman of Axilor ventures, he promotes start-ups because starting his own business with six other friends in 1981 changed his life. Gopalakrishnan talked to Business Insider about his early life which has made him who he is today.

 

 

 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58182579" title="Exclusive: Mahesh Murthy thinks that the future of investing in India isn’t the current Venture Capital Model" rank="1.0" kind="RELATED" publishDate="Apr 14, 2017, 7:14 PM" mstype="2" mssubtype="0"></div></div> “I was brought up in a world with no internet or even computers, so my knowledge was limited to studies and I devoured books both while studying and in different libraries. I studied at the <keyword id="4469078" type="UNKNOWN" weightage="20" keywordseo="university-of-trivandrum">University of Trivandrum</keyword> and I remember cycling everywhere to get books or to attend classes. My parents encouraged my obsession and even though they wanted me to be a doctor, IIT-Madras happened, and they were encouraging,” Kris explains how he ended up at an IIT. Gopalakrishnan was stoked at the institute where they had the access to the best computers and the college was encouraging innovation at all levels. He recalls an incident where his professor caught him reading on a cycle. ” Professor Mahabala had started this new Fortran programming course that he knew I’d be interested in, and encouraged me to join. That course ignited my love for experimentation and I never looked back at anything else,” Kris says, fondly. 

 

 

 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58343343" title="Exclusive: K Ganesh&amp;#39;s Growth Story with Start-ups is Never-ending and Here’s the Next Chapter" rank="1.0" kind="RELATED" publishDate="Apr 24, 2017, 5:42 PM" mstype="2" mssubtype="0"></div></div>












First Entrepreneurial Stint that Worked When it comes to work, Gopalakrishnan counts his stars and says that he was lucky to find people who supported him, no matter what. “I started working at Patni computers in Pune where I met Narayana Murthy. He wanted to start his own venture and asked me to come on board; I couldn’t refuse because I looked up to him as a senior,” Kris recollects. With a dream team and a great manager like Murthy on board, Gopalakrishnan was not worried about him starting up at a young age of 27. He agrees that he was scared to tell his family and when he got married the same year as the incorporation of the company, he waited till the wedding to make the announcement. Luckily, everyone was unfazed and Kris started the first sailing course on the entrepreneurship, smooth. 

 

 

 

 

 

 <div type="embedgroup"> <div type="Article" hostid="261" msid="58292743" title="Exclusive: K. Ganesh Made BigBasket and Portea Medical Blockbusters in India, and This is his Unique Life-story" rank="1.0" kind="RELATED" publishDate="Apr 21, 2017, 12:00 PM" mstype="2" mssubtype="0"></div></div>












Starting up from just Rs. 10,000, Infosys is now worth billions and Gopalakrishnan thinks that it’s all because the company built its way up slowly without any external funding and just focus on the product that they believed would change people’s lives. It did fast track his life and now he’s helping people to let go of their training wheels.

Exclusive: Kris Gopalakrishnan Current Ace Investor and Infosys Founder Reflects Back on his Startup Days

At a time when it’s raining acquisitions everywhere, a company names Apax Partners is planning to exit an acquisition. According to an Economic Times report, Apax Partners, which had financed IGate's $1.2-billion (Rs 7,482 crore at current exchange rate) takeover of Patni, is planning to exit the acquisition, which is on the top lists of acquisition targets in the IT industry. 
 
The financial daily reports that Capgemini, Atos and Genpact are trying to acquire a part of IGate’s Patni Computer that Apax Partners have put on sale. 
 
In November, Apax Partners, which owns about 30% of the company, converted its debt in the company into equity and then filed with the US Securities and Exchange Commission to have the option to sell its entire stake. 
 
 
The report further explains why three IT players (mentioned in the report above) are interesting in iGate. "IGate is the Goldilocks of the IT industry. They are not too big, not too small. They are just the right size and scale. And they'd be a good fit for Capgemini, Atos or even Genpact," said Peter Bendor-Samuel, CEO of IT advisory firm Everest. 
 
Of all three, Capegemini is expected to be a likely buyer of the US-headquartered company feels analysts. London-based UBS analyst Michael Briest mentioned in a note that Capgemini would receive additional tax benefits from the deal, as it is carrying a large deferred tax asset in the US.

Guess who’s racing to claim their stakes in IGate?

When <keyword id="6419840" type="PERSON" weightage="100" keywordseo="Azim-Premji">Azim Premji</keyword> and <keyword id="6355623" type="PERSON" weightage="100" keywordseo="Narayana-Murthy">Narayana Murthy</keyword> first met, they were not meeting as the founders of two leading IT companies from India, <keyword id="10862" type="CITY" weightage="100" keywordseo="Wipro">Wipro</keyword> and <keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword>, respectively. Instead, Murthy was at that time working at Patni Computer Systems as head of its Software Group, and when he decided to change his job in 1979-80, he was advised to meet Premji for a similar job at the yet-to-be-started technology group at Wipro. 
 
As per a piece written by Murthy for <a href="http://economictimes.indiatimes.com/magazines/panache/the-azim-premji-i-know-narayana-murthy-on-the-wipro-legends-extraordinary-legacy/articleshow/53732147.cms">ET</a>, Azim, whom Murthy found very easy to transact with, didn’t quite find him appropriate enough for the job, and Murthy can never be thankful enough for that. This led to him founding Infosys without a delay, unlike what he had originally planned. 
 
As soon as Infosys started operating in the post-liberalisation era, relations between Azim and Murthy bettered, since both of them were on to something good, and shared a relation of mutual respect for each other. Calls, enquiring about progress and market strategies, started to happen from Premji’s end, and Murthy also never hid anything from him, knowing that they were superior to their competitors because of the pace of new ideas and their execution. 
 
The professional relation then proceeded to their personal lives, with Premji’s wife Yasmeen becoming good friends with Murthy’s wife Sudha. 
 
Murthy also applauds Premji as an honest person, not shying away from accepting his or Wipro's mistakes openly while also making an effort to correct them. 
 
Other than that, one can also learn good governance from him, on how to separate management from control, including honesty, decency, fairness and courtesy in every decision he takes. 
 
However, Murthy and Premji are not on the same page when it comes to their views on tax exemption for exports. While Murthy does not believe in any tax exemption for his industry, Premji favours continuation of tax exemption. 
 
As Premji completes 50 successful years as the leader of Wipro today, Murthy wishes him many more years of a happy, healthy, productive and prosperous life in this role, as well as in the roles of a patriotic Indian and a leading philanthropist.

Azim Premji rejected me for a job, and I am thankful to him for that: Narayana Murthy

<ul><li>India's former telecom regulator Pradip Baijal has explained how India has had trouble managing its spectrum roll out for next-gen communications technology over the last few decades.</li><li>The latest in this telecom - 5G - is also facing similar hurdles in India, with the government yet to finalise guidelines and announce auction of airwaves.</li><li>He also explained how different use-cases of 5G are relevant and important to India - from the point of view of consumers as well as the industry.</li></ul>India always had problems in dealing with spectrum. We wasted valuable wireless spectrum for fixed line services in 1995, unlike any other country, after the erroneous decision that expensive mobile phones were not for the poor Indians. The decision was reversed in 2004, but led to a lot of inspired criticism by mobile incumbents. Earlier, the government approved a Convergence Bill in 2001, for more efficient use of spectrum, but was not approved. The government/regulator, therefore, approved a Unified Access License in 2004, reduction in interconnect charges and tariff forbearance. But, it took inefficiently long to bring in these changes (it had to be done in stages, by many regulatory efforts). Unified License reduced tariffs 50 times, but increased government revenues. Mobile numbers growth immediately increased 10 times, and gradually 200 times, three times ever the leader, China. 3G spectrum auctions were efficient later, though delayed, and showed the huge loss in 2G allocation and crony capitalism involved, the basis of the CAG report. The allocations led to litigation and differing and controversial judgments by the Supreme Court/CBI Court, the issue still remaining open, but this was one of the issues on which the UPA lost heavily to NDA, in the ultimate court of elections in 2014. 4G auctions were conducted efficiently, even though they were delayed, and now we have come to 5G auction issues, with an ET news item commenting, "India is set to miss the '5G bus' following the lack of preparedness, unavailability of sufficient spectrum, absence of encouraging use cases, and uncertainty around radio waves sale for the next generation of telecom services." This is despite India appointing A.J. Paulraj (winner of the Marconi Prize) Committee to give the recommendations to the steps required. They gave the report in mid-2018, and despite giving the schedule, we have not moved fast. In the past, Prime Minister Modi-led government maintained that it "won't afford to miss 5G bus" like in the case of 2G, 3G, and 4G technologies that were deployed in India way later than many countries, thus losing the many early user advantages. 5G and India Before we discuss, let us understand the nature of use of 5G. For a layman, 5G is just next generation wireless infrastructure which will provide them voice and data services. However, it will impact much more due to its bit-level intelligence characteristics. 5G will provide an array of network intelligence which will get translated into precise and demand-led resource allocation. 1G came in 1980s and provided basic voice services, 2G in 1990s and enabled voice and SMS services due to its digital standards, 3G came in 2000s and introduced data services along with voice and SMS that enabled multimedia services. 4G pure IP network, came in 2010s, and enabled the application services and partially merged the telecom and information technology which gave boom to platform services. The architecture of 5G is designed to handle the connection of billions of devices including industrial machines with seamlessness and reliable data transfer with much faster speed. 5G is not only about high speed boost but it is about the intelligence at the bit level and low latency which will make it the foundational tech for multiple new tech., including self-driven cars, AR &amp; VR, telemedicine, robotic surgery, powering future smart cities, IoT, m2m, AI and manufacturing. 5G will change the future war fighting too due to increased situational awareness to increase the command and control of the battlefield. Once these networks come, 2G and 3G networks can be abolished, like in other countries for better overall spectrum utilization. We have not started. Industrial revolutions and change It has been shown that industrial revolutions change the world. Hirschman had said that these revolutions occur every 70 years. This was proved in IR 1.0, 2.0 and 3.0. The US and the West's GDP went up five to six times in IR 1.0 &amp; 2.0, while India and China went down 10 times (colonial loot was also the reason). Growth reversal with IR 3.0 But IR 3.0 changed the world with the technology being on a connected net and with globalization, available to the Third World (right from the beginning). Of course, the US helped China a lot post 1980, in technology dispersal, and helping China with accelerated WTO membership in 2001. This led to China growing eight times and India 2.5 times in a few years. IR 4.0 and 5.0 The world is now moving to the fourth and the fifth industrial revolutions in quick succession. Providentially, these revolutions are also happening on the same wire or wireless lines as in IR 3.0, and we have bright Indian minds working in the digital sector like Nadella, Pichai, Arvind Kuar, Banga, Tata, Kohli, Nilekani, Narayana Murthy, Patni, Soota, Premji, and millions of others located in Silicon Valleys around the world. The most exciting additions to the list are Mukesh Ambani, Sunil Mittal and Kumar Mangalam Birla. They have kept the mobile sector alive despite crony capitalism, and given the appropriate ambience, should do very well now. Through them, and despite Covid, the world has shown confidence in the Indian economy. China should do well because of enormous investment, past technology thefts, uninhibited US support till 2015, and R&amp;D. The fifth IR will happen with IT getting connected to human minds (AI and beyond). IR 5.0 having reached the human mind, perhaps cannot move beyond, and the 6th IR has to be in another area, maybe the planets, as visualized by Jeff Bezos. Again, India is well-placed. Creating an appropriate environment is the key. Role of private sector It may also be recalled that the 2G rollout had created strong private sector companies and from 10 per cent private network, it had gone to 80 per cent (though the public sector had grown too). Later, despite crony capitalism, they had survived, and are today, India's main hope to take us forward. With 5G networks being more powerful, they will surely impact GDP growth much more than the earlier generation networks and move the country towards Namo's $5 trillion economy in 2024. Fiscal pressure on the government - we can ill-afford to ignore: We are today also hit by Covid, huge bank NPAs, financial crisis, fiscal deficits and fall in investments. 5G rollout is an opportunity for huge network (and downstream) investments by existing private sector companies and their networks all over the country, without putting any fiscal deficit pressure on the government. I had, therefore, anticipated in my China book and articles, that the present is 'providence' for India, like it was 'providence' for China in the 80s with an imaginary 'cold war'. Pricing issues A word about pricing here - our entire 2G revolution came after tariff forbearance, and liberal availability, connectivity and regulatory reforms. Obviously, once 5G revolutions get moving, the disruptions would be higher. Indian economy/GDP did well during IR 3.0, its DNA being more IT-centric, demonstrated by high growth in these sectors during some periods of IR 3.0, when regulations were right (2004 to 2010), particularly vis-a-vis China, and also the Indian minds being more IT-centric, demonstrated by the success of IT (software) and mobile revolutions. World digital economy In 2019, the world celebrated the first full year when more than half of the world (51.2 per cent, or 3.9 billion people) had begun to participate in the global digital economy by logging onto the internet, from almost zero a couple of years back. The world is turning fully digital, and networks converging very fast. China has touched 840 million subscriber base and will be 1 billion at the end of 2020, with superior speed, whereas India has only touched 600 million broadband subscribers. The world will thus transform itself to a form that during IR 4.0 and 5.0 the versatile 4 and 5G networks will be more valuable than all other infrastructure, like roads, rail and air transportation systems etc. Looking at the future, China has created companies which are leading in 5G, AI, quantum computing and other digital products and shaping up the digital behaviour of the people because they are deploying networks faster and learning by doing it. China is also leading in the standardization and patents of the digital ecosystem, manufacture of equipment etc. In contrast, the Indian 5G process is yet to commence (allocation of spectrum and installation of 5G equipment), though we have done extremely well despite late start in the past. India can grow in IR 4.0 given its human capital pool, the start in the use of algorithm prowess and an established IT hub, only if we install 4G and 5G systems adequately. But expensive and presently unviable (for India, since IR 4.0 and 5.0 industries and services have not started) 5G systems are likely to come in slow. Also, the spectrum and equipment prices are anticipated to be high. Unless both spectrum and equipment prices are low and heavily backloaded, I do not see India coming out of the jigsaw puzzle, and not falling back severely in the digital war. And if we miss India's turnaround moment, India's vast market and trained manpower will be used by advanced countries to develop 5G / IR4.0 and 5.0 networks fast. The Paulraj Committee recommended that 5G will mature between 2019 and 2024. India should take lead and become an innovator in 5G applications. (Pradip Baijal is former Secretary, Disinvestment and former Chairman, TRAI. This article is in continuation of his book, Containing the China Onslaught, published by Quadrant, and available on amazon.in and walmart, and further to a review of China's growth in Defensive Offence) <div type="Youtube" id="gFmRP3whXmU" title="Pradip Baijal Explains History of China's Economic Rise." thumbUrl="https://i.ytimg.com/vi/gFmRP3whXmU/mqdefault.jpg"></div>

India's former telecom regulator shows how much India is lagging behind in the 5G pursuit

Has <keyword id="10863" type="COMPANY" weightage="80" keywordseo="CapGemini">Capgemini</keyword> paid a lot to secure a place in the US, the largest IT outsourcing market, by acquiring IGate? 
 Capgemini has offered to buy <keyword id="2827205" type="UNKNOWN" weightage="80" keywordseo="IGate-Corpfor">IGate Corpfor</keyword> $4 billion funded by internal cash, debt and equity. 
 
This is 3.2 times IGate's annual revenue of $1.2 billion in 2014. 
 
Some of the deals over the last four years, where small and midsized Indian IT companies were bought, the ratio was around 1.6 times. In addition, the deal value is over 15.3 times IGate's earnings before interest, tax, depreciation and amortisation (EBITDA) of $263.9 million in 2014 said The Economic Times. 
 
It is marginally higher than the Bloomberg median of 14.6 for similar deals. This may make the IGate acquisition sound expensive. 
For instance, Patni Computer Services was valued at over Rs 5,560 crore or 1.6 times its annual revenue when IGate acquired it in January 2011. In another deal, Baring Partner valued Hexaware at Rs 3,000 crore or 1.5 times sales during the August 2013 acquisition of the latter. Analysts think that the premium is justified given the IGate's strong foothold in the North American market, which has been the biggest outsourcing market for IT vendors. <keyword id="369645" type="COMPANY" weightage="80" keywordseo="Cap-Gemini">Cap Gemini</keyword> predominantly serves Europe with over 70% revenue coming from the region. After the acquisition, the Europe share will reduce to a half. 
 "Capgemini's EPS (earnings per share) is expected to improve by 12% in CY16 and by 16% in CY17 due to the acquisition. Given IGate's scale and efficiencies, the premium seems to be justified," said Reliance Securities' IT analyst <keyword id="2827206" type="UNKNOWN" weightage="80" keywordseo="Apurva-Prasad">Apurva Prasad</keyword> told ET. 
 IGate's revenue increased at a three-year compounded annual growth rate (<keyword id="107168" type="ORGANIZATION" weightage="80" keywordseo="CAGR">CAGR</keyword>) of 18% in 2014. Net profit available for common equity holders rose at a CAGR of 28.4%. 
 
A look at some of the deals struck a decade ago reveal that valuations were aggressive where the buyers identified operational synergies. 
 <keyword id="43340" type="CITY" weightage="80" keywordseo="Oracle">Oracle</keyword> valued iFlex at 3.5 times sales during the 2005 acquisition worth Rs 3,960 crore ($909 million) at the time. In another deal during 2006, EDS valued Mphasis BFL at 3.5 times sales said ET. 
 
iGate ended the day 3.29 per cent higher on Nasdaq.

You Searched For "patni computers" and got 8 results

IGATE sells domestic IMS for $5 million to MindSquare Technologies

BI India Bureau

9 people who pocketed millions all because of the Capgemini-IGate deal. Here’s how much each of them made

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Capgemini eyeing Igate?

BI India Bureau

Exclusive: Kris Gopalakrishnan Current Ace Investor and Infosys Founder Reflects Back on his Startup Days

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Guess who’s racing to claim their stakes in IGate?

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Azim Premji rejected me for a job, and I am thankful to him for that: Narayana Murthy

BI India Bureau

India's former telecom regulator shows how much India is lagging behind in the 5G pursuit

IANS

Capgemini-IGate: Has Capgemini over paid for IGate?

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