Virtusa Corporation, a US -based IT consulting, technology implementation and application outsourcing services provider, has acquired substantially all the assets of ALaS Consulting LLC for an aggregate cash consideration of $27.8 million (approximately Rs 124 crore). ALaS, based out of New York, is a consulting and advisory services provider to financial services companies
Virtusa, which has offices in the US and UK, and global delivery centres at Hyderabad and Chennai in India and Colombo in Sri Lanka, has added capital markets and investment banking domain expertise, consulting and programme management skills with this acquisition.
ALaS provides Virtusa with approximately 150 practitioners, including former senior Wall Street professionals with significant industry experience, driving critical initiatives in areas such as regulatory compliance; trading desk operations improvement and controls; software package selection, programme management and functional testing; and increasing automation to reduce costs.
“This acquisition will further enable Virtusa to identify and execute transformational programmes, take on the downstream technology implementation and strengthen Virtusa’s strategic position across its BFSI client base,” Kris Canekeratne, chairman and chief executive of Virtusa, stated in a press release on Wednesday.
For the fiscal year ended March 31, 2012, Virtusa management expects ALaS to contribute revenues of approximately $24 million (Rs 107 crore) to $26 million (Rs 116 crore). Virtusa also expects the acquisition to be accretive to fiscal year 2012 earnings per diluted share by $0.01 to $0.05, inclusive of transaction and amortisation expenses. Transaction expenses are expected to be approximately $450,000 of which approximately $375,000 have been incurred in the first fiscal quarter ended June 30, 2011.
Under the terms of the asset purchase agreement, Virtusa has acquired substantially all of the assets of ALaS for an aggregate cash consideration of $27.8 million, of which 10 per cent has been held back by Virtusa for a period of 12 months as security for the sellers’ indemnification obligations.
As part of the transaction, all of the employees of ALaS, including the management team, accepted employment with Virtusa. and the company has agreed to issue an aggregate of up to $4 million (Rs 17.84 crore) in shares of restricted stock from Virtusa’s stock option and incentive plan, not to exceed 250,000 shares, to these new Virtusa employees. The shares will vest annually over a four-year period, the release added.