Virtusa expands Europe ops with TradeTech buyout

Nasdaq-listed company has acquired all outstanding shares of TradeTech for approximately $20 mn

US-based IT consulting, technology implementation and application outsourcing services provider, Virtusa Corporation, has expanded its footprint in Europe with the acquisition of Swedish outsourcing and consulting firm TradeTech Consulting Scandinavia AB.

The Nasdaq-listed company, which has its global delivery centres at Hyderabad and Chennai in India, has acquired all the outstanding shares of TradeTech for approximately $20 million cash, and up to $4 million in earn-out consideration upon TradeTech’s achievement of certain revenue and profit milestones for the 2014 calendar.

“The complementary expertise that TradeTech delivers will help increase our total addressable market and provide our combined client base with expanded service offerings. In addition, this acquisition is an important step in establishing Virtusa in Nordic (Denmark, Finland, Iceland, Norway and Sweden) countries and providing a broad set of consulting and outsourcing service to this region,” Kris Canekaratne, chairman and chief executive of Virtusa, said in a release on Monday.

The acquisition brings into Virtusa’s fold a 60-member team of TradeTech as well as the latter’s core strengths, including technology consulting, regulatory and compliance, implementation of global asset management and treasury platforms and managed services.

Virtusa is funding this transaction through a  $25-million secured revolving credit facility with JP Morgan Chase Bank. The term of the credit facility is five years, ending December 2018. This facility replaces Virtusa’s existing $3-million line of credit.