![\"Persistent](\"https:\/\/static.toiimg.com\/thumb\/msid-132079365,imgsize-32098,width-400,height-225,resizemode-4\/132079365.jpg\" "\\"Persistent")
<\/div>\n<\/div>\n<\/div>\nBENGALURU: Responding to concerns over unusual trading activity in Munich-based IT firm Nagarro\u2019s shares ahead of the deal announcement, Persistent Systems CEO Sandeep Kalra said the company followed \u201ca very strict protocol\u201d and tightly controlled access to the transaction. His comments came after Nagarro chief executive Manas Human told Reuters that he expected Germany\u2019s financial regulator, BaFin, to investigate the sharp rise in Nagarro\u2019s stock before the takeover was announced. Nagarro\u2019s shares surged nearly 20% to \u20ac 40.4 on Friday, hours before the two companies unveiled the $1.3-billion deal after market closing. On Monday, the stock jumped another 88% to around \u20ac 76, nearing Persistent\u2019s offer price of \u20ac 81 a share. \u201cWe had a very small team working on the transaction. Between Persistent and our advisory teams, the process was very tightly controlled,\u201d Kalra said. \u201cI have no other comments to make because I have no idea what may or may not have happened elsewhere. I would be very disappointed and shocked if anything had leaked from our side. There\u2019s also no reason for people in India or within our teams to trade because they have zero trading capability in Germany.\u201d Persistent\u2019s all-cash bid for Nagarro would create a $2.9- billion digital engineering and AI company with more than 46,000 employees. The market, however, reacted cautiously. Persistent\u2019s shares fell nearly 11% on Monday to a near 15-month low as investors and analysts flagged concerns over the acquisition\u2019s size, integration risks and Nagarro\u2019s lower margins. \u201cThat\u2019s something you see with almost every large acquisition. The initial reaction is often not positive because investors don\u2019t necessarily understand the strategic rationale immediately. Their first response is usually: it\u2019s too big, it\u2019s happening in a difficult environment...,\u201d Kalra said. He said the deal represented a rare opportunity and that Persistent may not have been able to pursue an asset of Nagarro\u2019s scale in a stronger market. He pointed to Persistent\u2019s track record of 24 consecutive quarters of above 3% sequential growth, saying the transaction would prove accretive over time. Persistent had long maintained that any large-scale acquisition would likely be in Europe, with only 8.5% of the company\u2019s revenue coming from the region. Now the combined entity will derive around 65% of its revenue from the US and 22% from Europe.<\/div>\n