US based IT services provider Virtusa Corporation has decided to buy majority stake in Indian software services company Polaris Consulting and Services for $270 million.
Virtusa will acquire 51.7 percent stake in Polaris held by Arun Jain, founder and chairman of Polaris, Orbitech, and certain other minority stockholders, for approximately $180 million or INR 11,728.08 million.
Virtusa will make an unconditional mandatory offer to the public shareholders of Polaris to purchase up to an additional 26 percent. The price for the shares to be purchased in the unconditional, mandatory open offer, is estimated at approximately $90 million or INR 5,877 million.
As per the agreement, Virtusa will purchase the shares at a price of around Rs 220.73 per share.
“This will also enable me to establish and pursue innovative models for social impact using Design Thinking in the areas of health and education, in addition to my focus on steering Intellect Design Arena Limited into a global digital products powerhouse,” said Jain.
Chennai, India-based Polaris had 7,650 employees, serving its client base through 12 development centers. Polaris generated total pro forma revenue of approximately $150 million for the six months ended September 30, 2015.
The combination of Virtusa and Polaris would create a global provider of IT services and solutions to the banking and financial services industry. Virtusa expects to realize over $100 million of cumulative revenue synergies over the next three fiscal years from the business combination.
Kris Canekeratne, chairman and CEO of Virtusa, said: “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.”
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