Virtusa Corporation, a global information technology (IT) services company which provides IT consulting, technology and outsourcing services, brought in US$173 million in revenue for the financial year ended March 31, 2009 and is on track for further expansion and growth in the current year.
Kris Canekeratne |
In an interview with the Business Times, Chairman and CEO Kris Canekeratne said the company which is a publicly traded and listed on the NASDAQ, has had a five year comprehensive annual growth rate of 32% up to March 2009 and a very strong balance sheet.
Mr. Canekeratne said 2009 had been an interesting and difficult year, particularly in the first half. The second half of the year saw more stability. The company is headquartered in Westborough, Massachusetts in the US and has offices through out the US, Europe and Asia. Virtusa’s technology centres are located in the US, UK, India and Sri Lanka with a workforce of over 3,600 employees.
Mr. Canekeratne said there were two major acquisitions in late 2009 and early 2010. The first was InSource Consulting in November 2009, a company which specializes in consulting services to the insurance industry. The second acquisition in early February 2010 was ConVista Consulting in the US, a specialist in applications for high volume businesses to consumer markets.
Mr. Canekeratne added that organic growth in the second half of 2009 and the acquisitions have enabled Virtusa to grow 11% sequentially in the December 2009 quarter.
The company has projected 15% sequential growth for the March 2010 quarter. “The majority of our expansion growth has been organic,” he said, adding that the company is focused on integrating their acquisitions.
Commenting on the brand roll out earlier this year, Mr. Canekeratne said clients are looking for ways to accelerate their business outcomes. “The rebranding was designed to specifically meet our client’s needs and to extend their abilities to provide services for their customers.” In a changing economic environment, he explained that the focus is on driving business by helping clients reduce their costs and accelerate their ability to introduce new products to the market.
Acquisitions
A press release on the Virtusa website states that under the terms of the agreement, InSource, LLC, was acquired for US$7.3 million in cash subject to post closing adjustments, including up to an additional $0.5 million in earn-out consideration upon InSource’s achievement of certain revenue and profit milestones for the three and twelve month periods ending 31 December 2009.
InSource, described as a privately held technology consulting firm with domain expertise in the insurance and healthcare industries, will become a wholly owned subsidiary of Virtusa.
InSource employs approximately 50 experienced practitioners specializing in program management and IT strategy. According to the press release, the acquisition was expected to immediately expand Virtusa’s service offerings in the insurance and healthcare industries.
Another press release states that ConVista Consulting, LLC, was acquired by Virtusa for US$24.8 million in cash including up to an additional US$2 million in earn-out consideration upon ConVista’s achievement of certain revenue and profit milestones for fiscal 2011. ConVista Consulting is described as a U.S.-based, privately-held, market leader in finance transformation, specifically focusing on high volume collection, disbursement, claims and billing systems in banking, financial services and insurance (BFSI).
Results
Virtusa also announced its third quarter fiscal 2010 consolidated financial results through a press release on the company’s website. It states that revenue for the third quarter of fiscal 2010 was US$41.7 million, an increase of 11% sequentially and a decrease of 7% year-over-year. On a constant currency basis, third quarter revenue increased 11% sequentially and decreased 8% year-over-year.
Virtusa also reported income from operations of US$3.4 million for the third quarter of fiscal 2010, an increase compared to US$3.2 million for the second quarter of fiscal 2010, and a decrease compared to US$5.4 million for the third quarter of fiscal 2009. |
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