US-based Intelligroup Inc, a provider of strategic IT consulting, application management, support and implementation services, and Japan-based IT services company NTT DATA Corporation have entered into a merger agreement pursuant to which NTT will acquire Intelligroup for about $199 million (approximately Rs 916crore) through an all-cash tender offer. This will be followed by a second-step merger to acquire all remaining shares at the same price paid in the tender offer.
Intelligroup, with global delivery centres in Hyderabad and Bangalore, employs over 2,600 resources globally including more than 1,800 in Hyderabad.
NTT DATA, through its wholly-owned subsidiary Mobius Subsidiary Corporation, will make an offer to purchase all outstanding shares of Intelligroup common stock for $4.65 per share, which represents a 21.1 per cent premium to Intelligroup's average closing stock price over the last three-month period ended June 11, 2010, and a 27.7 per cent premium over the closing price of Intelligroup's common stock on June 11, 2010.
The tender offer is scheduled to commence within 6 business days and will expire after 20 business days unless the offer is extended. The tender offer is conditioned on the tender of more than a majority of Intelligroup’s outstanding shares on a fully-diluted basis, and various other conditions, including customary regulatory approvals. The transaction is not conditioned on financing.
The board of directors of Intelligroup will recommend that its stockholders tender their shares in the offer. In connection with the offer, SB Asia Infrastructure Fund LP and Venture Tech Assets Private Limited, which collectively hold approximately 62.9 per cent of Intelligroup's outstanding common stock, have agreed to tender their shares into the offer.
The transaction would give NTT DATA access to Intelligroup's blue-chip client base and specialised knowledge of SAP and Oracle. NTT DATA would also benefit from Intelligroup's deep industry experience and solutions focused on the life sciences, high-tech and discrete manufacturing, and consumer packaged goods verticals and its efficient global delivery model, enabled by its delivery centres in India.
More From This Section
“NTT DATA is looking to expand into the US market, where we are strong at, and looking at a good presence from a global delivery perspective in India. We don’t have much presence in Japan and they don’t have good presence outside of Japan. This is a great fit,” Vikram Gulati, chief executive officer of Intelligroup, told Business Standard over phone from the US.
“NTT DATA’s size and global IT capabilities including data centres and cloud computing enhance significantly our ERP solution capability and also allow us to offer total outsourcing solutions. It enables us to offer enhanced vertical offerings, and greater geographic coverage to our customers.
“Further, this allows us to leverage the financial strength of NTT DATA, which enables us to make greater and more long-term investments in the business. The synergy between the two firms creates a formidable force that will enable us to win in the marketplace,” he said.