iGATE divests its professional services biz

IT and BPO services provider iGATE Corporation has decided to divest its Professional Services business. The divestiture will occur through a sale of the business or through a tax-free spin-off of the business to iGATE shareholders.

Commenting on the divestiture, Sunil Wadhwani and Ashok Trivedi, co-founders of iGATE, said: "This separation is a logical next step for the company. Our board has reviewed the divestiture and believes it will benefit our shareholders, employees and customers."They pointed out that the Global Solutions and Professional Services businesses operate in different markets with varied business models.

"The divestiture will better position each business to benefit from their growth opportunities. In addition, the shareholders of iGATE will benefit from the increased clarity of being a focused offshore services company. The demand for offshore IT and BPO services continues to grow at a rapid rate," they added.

In accordance with generally accepted accounting principles (GAAP), the company's historical and future financial results will now reflect the Professional Services business as discontinued operations, effective beginning as of January 1, 2008.iGATE has retained Credit Suisse Securities (USA) LLC to assist with the divestiture.

Read more in The Business Standard article.

iGate to delist from Indian bourses

In order to create a simpler holding structure, the US-headquartered iGate Corp Wednesday said it plans to delist its subsidiary iGate Global Solutions from the Indian bourses.

The parent holds 80.1% stake in iGate Global and under the Indian listing norms, would need to hike its stake past 90% for delisting.iGate Global stock closed 7% up at Rs 340 on the BSE on Wednesday.On Nasdaq, iGate Corp was down 2%.

Read more in The DNA Money article.