New entity to retain latter's name, employees

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BangaloreFeb. 8In one of the biggest all cash deal, leading global IT services company Caritor Inc has announced the acquisition of Keane Inc for a consideration of $854 million. The merged company, after acquisition formalities are completed, is expected to become a $1 billion revenue entity.

According to a company press release issued here, the two companies have entered into a definitive agreement for the merger. The new entity will retain the name of Keane and its 14,000 employees.

The deal will be financed through a combination of equity to be contributed to Caritor by Citigroup Venture Capital International (CVCI) and debt financing by Citigroup Global Markets Inc, UBS Securities LLC, and Bank of America Securities LLC, the release said.

The transaction is expected to be completed in the second quarter of this calendar year after regulatory approvals.

The merged company will acquire the capability of providing a comprehensive IT and business services to its clients, bringing together the strength of the Boston-based Keane's IT delivery and client service capabilities with the flexibility of Caritor's leading US-based global IT services business.

The US operations for the combined company would be based in Boston. The Caritor founder Chairman and CEO, Mr Mani Subramanian, would become the Chairman and CEO of the combined entity.

"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 Mr Subramanian.

"This is a significant transaction for the industry and reflects our confidence in the new entity, its potential and its employees," said Mr Dipak Rastogi, Head of CVCI.

(This article was published in the Business Line print edition dated February 9, 2007)
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