Phaneesh Murthy, Shashank Singh join Patni board

iGate chief executive officer Phaneesh Murthy and Apax Partners co-head for India Shashank Singh have joined the board of Patni Computer Systems Ltd, replacing one of the co-promoters Gajendra Patni and General Atlantic's managing director William Grabe. The latter two have stepped down as part of the transition following the joint purchase of a majority stake of the firm by NASDAQ-listed iGate and buyout giant Apax.

This comes a month after the promoters along with decade-long private equity backer General Atlantic struck a deal to sell their entire stake worth a little over 60 per cent (on a fully diluted basis) to iGate and Apax Partners for around $921 million.

The iGate-Apax combine has already announced an open offer for a further 20 per cent stake, as per Securities and Exchange Board of India's takeover norms (See: iGate makes open offer for 20.6 per cent stake in Patni Computers).

This could take the total payout for the stake as high as $1.22 billion. The deal involves Apax investing around $480 million in iGate, which will also raise debt to acquire Patni. (See: iGate pays $1.22 billion for 63 per cent Patni stake).

Prior to the deal, Patni had a 13-member board of directors (including General Atlantic's Abhay Havaldar who was an alternate director to William Grabe). Besides Gajendra, the other two Patni brothers Narendra and Ashok are also on the board and remain so as of now.

For the 47-year-old Murthy, this marks a step forward in achieving scale for iGate. For the IIT-IIM graduate, who was director of Infosys and head, sales & marketing and communication & product services (CAPS) when he resigned over an alleged sexual harassment case in July 2002, the key challenge would be to see through a far bigger business consolidation than what he supervised when his own start-up Quintant was snapped up by iGate.

The big question is what happens to K Jeyakumar, who was brought in as a professional chief executive by Narendra Patni with huge fanfare around two years ago. An Australian citizen, Jeyakumar is the highest paid IT executive of a listed firm in the country and also has a board seat at Patni.