iGATE, a provider of outsourcing services, and CAC, a provider of IT services, have signed a non-binding letter of intent regarding formation of a strategic business alliance to deliver IT and integrated technology and operations services to CAC’s Japanese clients for their international operations.
According to iGATE, the primary purpose of the strategic alliance is to exploit the growing opportunities created by the overseas expansion of Japanese corporations.
Under the framework of this alliance, CAC has the right in its discretion to acquire up to 2.5% of the issued and outstanding voting shares of iGATE by purchasing iGATE shares in the secondary market.
While the final terms of the alliance are subject to the future execution of a definitive agreement, CAC and iGATE have targeted revenue in excess of $50 million to be generated over the next three years from customer contracts based upon the business alliance.
Toshio Shimada, president and CEO of CAC, said: This proposed partnership is an important next step for our companies. With Japanese companies expanding their overseas presence, we anticipate an increase in the demand for technology services needed to support their growth. We wish to capitalize on this demand through our partnership with iGATE.
Phaneesh Murthy, CEO of iGATE, said: We are pleased to have an opportunity to partner with CAC. This proposed alliance will help iGATE expand its market share among Japanese customers, while making it a preferred technology partner for Japanese companies across the globe. We are creating what we believe will be a model of cooperation with Japanese companies.
