Virtusa to acquire 51.7% in Polaris Consulting & Services
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Mr.Kris Canekeratne
Virtusa Corporation, a Sri Lankan-led global business consulting and IT outsourcing company, announced last week that it has entered into an agreement to acquire a majority 51.7 per cent stake in Chennai-based Polaris Consulting & Services, Ltd. (Polaris, a global provider of IT solutions primarily to the banking and financial services industry).
For Massachusetts-headquartered Virtusa, with relatively low key operations in India, the Polaris acquisition at US $ 270-million (nearly Rs. 38 billion) will give access to new clients in the banking and financial services space to consolidate its existing strengths, analysts say.
The 19-year-old Virtusa run by Kris and Tushara Canekeratne, has leading software vendors in banking and financial services besides other areas including key clients such as British Telecom and JP Morgan Chase.The transaction includes both the majority interest and an unconditional mandatory open offer to purchase up to 26 per cent of the outstanding shares of Polaris from the public shareholders.
“Polaris is another entity with deep financial capability which will help us to expand our end to end banking and financial solutions,” Mr. Canekeratne told the Business Times on the sidelines of a media briefing held in Colombo where the announcement was made. He added that the company expects to realise over $100 million of cumulative revenue synergies over the next three fiscal years from the business combination.
The acquisition would combine Virtusa’s deep domain expertise in consumer and retail banking with Polaris’ proven strength in corporate and investment banking,
he added. The Polaris transaction is expected to close during Virtusa’s fourth fiscal quarter ending March 31, 2016. The closing of the definitive agreement and the unconditional mandatory open offer to purchase shares from the public shareholders of Polaris are each subject to customary conditions, including receipt of required regulatory approvals.“The combination of Virtusa and Polaris will enable us to provide end-to-end global BFS services and solutions, expand our addressable market, and position us to pursue larger consulting and outsourcing opportunities”, Mr. Canekeratne said.
“We are enthusiastic about working with the Polaris team to build out our platform and offer clients a distinctive set of offering.”