IT consulting and systems integrations firm Caritor has acquired IT and BPO service provider Keane in an all-cash deal worth $854m.
NEW DELHI: IT consulting and systems integrations firm Caritor, founded by Mani Subramanian, on Thursday announced the acquisition of IT and BPO service provider Keane in an all-cash deal worth $854 million. The combined entity, to be known as Keane, would have anticipated annual revenues of over $1 billion and more than 14,000 professionals.
The transaction is expected to be completed in the April-June quarter subject to approval of shareholders and regulators.
Considering there were not many overlaps between the two businesses, it is expected that there would not be any employee impact in India or the US, Sukant Srivastava, Keane’s global vice-president and managing director, India, said.
The new company, to be headquartered in Boston, would maintain Keane’s employee base in Boston, Massachusetts.
Caritor’s chairman and CEO, Mani Subramanian, will become the chairman and CEO of the combined entity.
Srivastava said the move has doubled the size of the organisation overnight and increased its footprint and capabilities in India, which augurs very positively for its customers.
Keane has facilities in Gurgaon, Noida and Hyderabad, while Coritor has operations in Chennai and Bangalore.
Under the terms of the merger agreement, holders of Keane’s common stock will receive $14.30 per share in cash. The purchase price represents a 19% premium over Keane’s closing share price on February 6, 2007.
“Caritor was founded on the belief that there was a strong need for a properly proportioned, US-based multi-national resource to meet the ever-growing software development and business process outsourcing needs of our global clients,” said Mani Subramanian, founder, chairman and CEO of Caritor. “Today, it is clear that clients require strong, locally-based consulting and client service combined with the flexibility and cost-effectiveness of a broad range of global IT services. The combination of Caritor and Keane will offer clients these comprehensive services,” he added.
The transaction will be financed through a combination of equity contribution from Citigroup Venture Capital International and debt financing by Citigroup Global Markets Inc, UBS Securities LLC, and Bank of America Securities LLC.
Keane Inc has been in business since 1965, while Caritor was founded in 1993.
ncG1vNJzZmivp6x7pbrAoqWdoZFjsLC5jpusrKGemsC0e9Gep6iqpGKwor7IraarZZeawbR5yp6Yp51dm7yzeZdua6ZlYWWEeYSQcA%3D%3D