"iGATE Corporation (NASDAQ: IGTE), the first Business Outcomes based integrated technology and operations company, today announced that its subsidiaries have executed definitive agreements to acquire a majority stake in Patni Computer Systems Ltd. (NSE: PATNI, NYSE: PTI), the Mumbai-based IT services and BPO company. The transaction is valued at approximately $1.22 billion, including the mandatory open offer to the public shareholders of Patni. The transaction is expected to be completed in the first half of 2011. iGATE expects the transaction to be accretive by 2012 on a cash earnings per share basis. "
-- Excerpt from iGate press release, January 10, 2011
Now that the acquisition has been announced, it is expected that current Patni customers will be cautious and concerned, but it would be unwise to assume that they are ready to switch vendors. The reality is, application development and maintenance (ADM) transitions are not easy, they have the potential to cause a lot of disruption, and are more likely to impact the client’s end customers. In addition, client current priorities are focused on new technologies and keeping pace with their industries. If they are happy with their existing relationship they won’t divert the attention needed to switch out the vendor due to an acquisition. Besides, acquisitions in the tech space are more common these days. Our research shows that Sourcing & Vendor Management Professionals are better prepared to articulate their concerns and expectations to the acquiring firms. They are less likely to switch vendors today, due to an acquisition, than they were 5-7 years ago.
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