×
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Virtusa says will acquire Polaris for Rs 1,760 crore

Combo to employ around 18,000 staffers
Last Updated 05 November 2015, 17:28 IST

Polaris Consulting and Services, a Chennai-based digital transformation and financial technology company, on Thursday announced that it has entered into a definitive share purchase agreement (SPA) with Nasdaq-listed Virtusa Corporation valued at $270 million (Rs 1,760 crore).

Accordingly, Virtusa’s India subsidiary Virtusa Consulting Services will acquire approximately 51.7 per cent of the paid-up share capital of Polaris from certain promoter entities led by Arun Jain and certain other shareholders, including OrbiTech Private (formerly known as Orbitech) at a price of Rs 220.73 per share, aggregating to $180 million or Rs 1,172.8 crore.

In addition, Virtusa will make an unconditional mandatory offer to public shareholders of Polaris to purchase up to an additional 26 per cent of the outstanding shares of Polaris. Assuming full tender and the offer price remaining unchanged, is estimated to cost $90 million (Rs 587.7 crore). 

The move will help Virtusa to provide end-to-end global banking and financial services and solutions and pursue larger consulting and outsourcing opportunities.

The board of directors of Polaris approved the execution of the SPA as Virtusa would be a complementary partner offering a compelling alternative to drive the digital agenda of the global BFS industry.

As of September 30, Polaris had approximately 7,650 employees, serving its global client base through 12 development centres. Together, the two companies would employ around 18,000 employees. For the six months ended September 30, 2015, Polaris generated total revenues of approximately $150 million.

For the same period, the company had cash, cash equivalents, and short-term and long-term investments of approximately $44.8 million. Virtusa had 2014 revenues of $479 million.

Commenting on the deal, Chief Executive Officer & Executive Director of Polaris Jitin Goyal said Virtusa and Polaris share a common goal of delivering best-in-class solutions and the highest level of service excellence to our clients.

Last year, IT services firm Polaris Financial Technology (Polaris FT) had carved out its products business into Intellect Design Arena. Polaris FT later rebranded itself as Polaris Consulting and Services.

Upon closing of this transaction, Citigroup Technology, Inc.  has agreed to designate Virtusa and Polaris as a preferred vendor for Global Technology Resource Strategy for the provision of IT services to Citi on an enterprise-wide basis.

The transaction is expected to close during the fourth fiscal quarter ending March 31, 2016.

Virtue in acquisition
*Virtusa India subsidiary Virtusa Consulting Services will acquire 51.7%. Another 26% will be bought through open offer
*Virtusa will buy shares from promoter Arun Jain and others, including Orbited, at a price of Rs 220.73 per share
*The move will help Virtusa to provide end-to-end global banking and financial services and solutions

 

ADVERTISEMENT
(Published 05 November 2015, 17:28 IST)

Follow us on

ADVERTISEMENT
ADVERTISEMENT