European IT consultancy Capgemini is buying Kanbay International, a Chicago-based provider of technology services to financial institutions, for $1.25 billion in a bid to boost its presence in India and the US.
Founded in 1989 Chicago-based Kanbay provides IT services to banks, insurance companies and securities and investment firms. The firm employs 6900 staff worldwide, including over 5000 in India.
Under the acquisition deal, Paris-based Capgemini will pay $29 per share in cash for the US consultancy. This represents a premium of 15.9% to Kanbay's closing share price on Wednesday. The transaction values Kanbay at $1.25 billion.
Capgemini says the acquisition significantly increases its presence in India and will double its staff headcount in the country to 12,000 by the end of 2006.
Paul Hermelin, CEO, Capgemini, says the acquisition "supports our growth strategy and significantly enhances our global banking, financial services and insurance (BFSI) practice, particularly in North America and India".
The French firm says the boards of directors of Capgemini and Kanbay have approved the transaction.
The deal, which is subject to customary closing conditions, including Kanbay's shareholders approval and anti-trust clearance, is expected to close by early 2007.