Carlyle Group bid on its own to buy control of Patni Computer Systems Ltd. and didn’t make an offer with Advent International Corp., said a person with direct knowledge of the transaction.
Carlyle, the world’s second-largest buyout firm, had previously been working with Advent to acquire the 45.9 percent stake held by Patni’s founding family as well as a stake held by General Atlantic LLC, said the person, who declined to be identified because the matter is private. Advent wanted to offer a lower price for the Indian software company, so Carlyle decided to go alone with its bid, the person said.
Former TPG Capital partner Vivek Paul is advising Carlyle and may join Patni’s board if its bid wins, the person said.
Christopher Ullman, a Carlyle spokesman, declined to comment. Narendra Patni, chairman at the Indian computer-services provider, didn’t respond to an e-mail and a call to his Mumbai office after office hours. Patricia Hedley, a spokeswoman for General Atlantic, and Louisa Feltes, an external spokeswoman for Advent, didn’t respond to e-mails.
A controlling stake in Patni would allow the winning bidder tap the recovering market for outsourced technology services, an industry that Forrester Research Inc. estimates will grow 7.6 percent to $253 billion next year after rising 2.7 percent in 2010.
The sale would allow 68-year-old Patni and his family to exit the company as demand for computer services helped the stock more than double since its initial public offering six years ago.
Patni shares jumped 2 percent yesterday in Mumbai to 490 rupees, taking the year-to-date gains to 14 percent.
Carlyle is competing with Apax Partners LLP and IGate Corp., which are jointly bidding for the stake, three people said on Dec 15. The management of Patni has been spending more time with the Apax group, two other people said.
A final decision may come by early next week, they said. IGate Chief Executive Officer Phaneesh Murthy and Benjamin Harding, a London-based spokesman for Apax, didn’t respond to e-mails seeking comment.
The Economic Times, citing people it didn’t identify, reported yesterday that IGate is set to win the Patni stake after Advent backed out.
General Atlantic held a 2.1 percent stake in Patni through the company’s Mumbai-traded shares, as of Sept. 30, and a 15.4 percent stake through its holdings in its American depositary receipts, according to data posted on the Bombay Stock Exchange’s website.
Patni, founded in 1978, prepares customized software and maintains computer systems for 280 customers in 38 countries. The seven founders of Infosys Technologies Ltd., India’s second-largest software exporter, worked at Patni Computer before starting their own company in 1981.
The company is currently India’s ninth-ranked software-services provider by market value. It relies on customers in the U.S. for the majority of its business and competes there with Tata Consultancy Services Ltd., which announced record North America sales in October.