Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of IT services provider iGate (Nasdaq: IGTE) dove more than 20% in intraday trading as investors reacted to a Wall Street Journal report that the company is raising $700 million to make a bid alongside Apax Partners for India's Patni Computer Systems (NYSE: PTI).

So what: Though we can say that iGate competes with major global outsourcers such as Infosys (Nasdaq: INFY), Wipro (NYSE: WIT), and Cognizant (Nasdaq: CTSH), the company is definitely an industry small-fry. iGate's $252 million in trailing-12-months revenue is a fraction of the billions that the other three giants have raked in. It's also dwarfed by the $686 million that Patni earned over the same period, making the acquisition a pretty big bite for iGate.

Now what: The drop in iGate's stock today shouldn't come as much of a surprise. By going after the larger Patni, iGate is setting up a deal that's riskier than most. And while the valuation multiples on Patni are low compared to iGate and other industry players, the sellers in this deal are the company's founding family and private equity group General Atlantic -- neither of whom is likely to be interested in selling if the price wasn't attractive. Tack on top of that the fact that iGate and Apax will face competition for the deal from Advent International and Carlyle Group, and you have even more reason for indigestion. Of course for now there's a lot of speculation involved in how (and whether) this will unfold, so investors will want to stay tuned as more details emerge.

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