Phaneesh Murthy, CEO, iGATE believes in doing ones karma and leaves the rest to destiny. After failing in his earlier attempt to acquire Hyderabad-based Satyam Computer Services, he has succeeded in snapping the Patni Computer Systems deal. In a discussion with Bibhu Ranjan Mishra, Murthy shares the roadmap ahead. Edited excerpts:
At Rs 503.5 per share for Patni, are you satisfied with the asset?
As a buyer, I might have asked for a cheaper price and as a seller, they might be wanting more. We reached a compromise that everybody is comfortable with.
Analysts are skeptical about the iGATE-Patni deal due to the size of Patni. When a smaller firm acquires a bigger one, it often leads to complications.
We are quite confident, we have a good team. More important, after I met the Patni leadership team, I feel a lot of them are very hungry for growth and committed. Between the two, we want to take a strong leadership team to take the company forward.
When Satyam was up for sale, you were among the few companies who had shown interest, but later stepped back. Do you think Patni has compensated?
I don't have any regrets. You do the best you can do and then leave everything to someone else. We did the best we could do at that time. Probably, we did not have the capability to pull through the transaction and I am glad we have matured in three years to have the capability to pull off a transaction of a much larger size. Satyam had bigger challenges at that point of time. The challenges here (at Patni) are to take a company moving like an auto rickshaw and convert it's speed to that of a car. So what we need to do is to inject a little sort of adrenaline and take it a little forward and faster.
Even Patni deal was challenging … a lot of competition?
The biggest challenge was to raise a capital of $1.25 billion. There are five or six companies in the IT services space who can do it.
With the closing of the deal, you will be in the billion dollar club. Was it an aspiration of the company?
In 2005, we had a mission statement saying we want to be a billion-dollar company by 2012. Now, we are a little ahead of the schedule. If it (Patni deal) would not have happened, we would have been little behind schedule.
Does a billion dollar in revenue makes any difference in the eye of customers?
Unfortunately, it does. Unfortunately, many sourcing departments have artificial constraints of $1 billion in revenue and 25,000 employees. But the buying process blocks out many people. This acquisition will help us to get there.
What will be your priorities?
We will create the new go-to-market strategy; create integrated leadership team; reach out to the customers, investors and the employees. In the Patni model, their top 10 customers grow at one or two per cent. We have to bring in our account management principles which have been helping us to grow our top 10 accounts quite strongly.
Will Patni CEO Jeya Kumar be retained till the integration is complete?
I don’t know. If we find a suitable role where we can retain all our employees, we will like to. If we don’t find a suitable role, then some employees will have to leave. Besides, when a service company is acquiring another services company, it is also acquiring the employees who are the biggest assets. So we have to protect them.
What will be your branding strategy?
We are yet decide that. All of that is going to be decided in the next two to three weeks. We have identified Mercer and Deloitte to help in the integration process. Mercer will do the bulk of the HR integration work and Deloitte has been given the mandate help in the company integration works.
Since you were earlier listed in India, and now are planning to continue Patni’s listing for time, any plan to again get listed in India?
No … you should not have two companies listing. It creates a lot of confusion in the minds of shareholders as to where the value will be. One can have the have the same company listed in two exchanges, one as primary and other secondary.
Are you comfortable with the huge debt you have taken to fund the acquisition?
I am not very comfortable. Like any conservative South Indian Brahmin, I don’t like debt. It’s a little difficult to accept that so much of debt is sitting on my balance sheet. The important thing is to see how we can take it off as quickly as possible.
