Debt financing first for India inbound M&A

Author: | Published: 20 Feb 2011

India’s biggest technology M&A deal to date has been backed by a rare debt-based financing structure.

California-based iGATE has acquired a majority stake in India’s sixth largest IT firm Patni Computer Systems.

The $1.22 billion deal is backed by private equity firm Apax Partners. iGATE has agreed to pay $921 million at Rs 503.50 per share for a 45.6% stake from the founding brothers of Patni, and a 17.4% stake from PE firm General Atlantic.

The buyer will also launch a $300 million mandatory open offer to the public shareholders of Patni for an additional 21% stake.

The buyer will raise $270 million financing through the sale of preferred convertibles and up to an...