French IT consulting group Capgemini has entered into a definitive merger agreement with software firm iGate under which Capgemini will acquire iGate for $4 billion, according to a statement from iGate.
As part of the transaction, which will see Capgemini pay $48 per share for the US-listed company, Apax Partners will sell its 29 percent stake.
The sale will generate total proceeds for Apax Europe VI, Apax Europe VII and Apax US VII of $1.2 billion, delivering a 4x return and an internal rate of return of 38 percent, according to a source with knowledge of the transaction.
Apax declined to comment on the transaction.
Apax originally invested in iGate in 2011, backing the company with $480 million to acquire a majority stake in Indian tech company Patni Computers in a deal worth an estimated $1.2 billion.
Headquartered in New Jersey, iGate posted revenues of $1.3 billion in 2014, alongside double-digit growth and a 19 percent operating margin, the statement said. The company’s largest market is North America, representing 79 percent of 2014 revenues, followed by Europe with 14 percent and Asia-Pacific with seven percent.
Nasdaq-listed iGate was trading at $47.43 per share at 11:58 ET, giving the company a market capitalisation of $3.835 billion.
Earlier this month Apax sold its stake in Italian bank Banca Farmafactoring to an affiliate of Centerbridge Partners, netting a return of around 5.5x. Apax made the original investment using capital from Apax Europe VI, a €4.31 billion 2005-vintage, according to PEI’s Research & Analytics division. It is understood that vehicle is currently valued at 2.2x, PEI reported earlier.