WESTBOROUGH, MA –Virtusa Corp, Westborough, MA-based technology outsourcing company, has floated an open offer to purchase 26 percent stake in Polaris Consulting & Services at Rs.220.73 per share and amounting to a total outlay of Rs.590 crore, a release said on Tuesday.
The offer which started on March 11, closes on March 28.
The open offer price of Rs.220.73 for the shares of Polaris reflects a premium of about 31 percent over the price of 6 months ago and about 40 percent over the price one year ago, the statement said.
“The earning numbers of Polaris have been average to below average over the last few quarters. Overall the small-cap and mid-cap IT companies have been laggards over the last six to nine months.
“The good performance of Polaris on the bourses is mainly on account of the ongoing open offer, After March 28, we expect the stock of Polaris to retreat,” said Dinkar Shanbhag, head- Institutional Equity, at Mumbai-based broking firm Lotus Global.
On March 3, Virtusa announced that its India subsidiary, Virtusa Consulting Services Private Limited (“Virtusa India”), has acquired all of the outstanding shares of Polaris Consulting & Services, Ltd. (“Polaris”) (BSE: POLARIS NSE: POLARIS MSEI: POLARIS) held by Mr. Arun Jain, founder and chairman of Polaris, Orbitech Private Limited, and certain other minority stockholders, representing an aggregate of approximately 51.7% of the fully diluted outstanding shares of Polaris for an average of $3.12 per share (INR 213.883 per share), for an aggregate purchase consideration of $165.89 million (INR 11,364 million).
Jitin Goyal will remain CEO of Polaris, and was appointed President, BFS, to lead Virtusa’s and Polaris’ business operations serving the banking and financial services verticals. Raj Rajgopal, President of Virtusa, was appointed President, ETS, and will lead Virtusa’s and Polaris’ operations serving the insurance, communications & technology, and media, information & other verticals. In their respective roles, Mr. Goyal and Mr. Rajgopal will be responsible for executing Virtusa’s and Polaris’ growth strategies, which will include driving over $100 million of cumulative revenue synergies over the next three fiscal years from the business combination.
Kris Canekeratne, Virtusa’s Chairman and CEO, stated, “We are extremely pleased to close phase one of the Polaris transaction and we look forward to completing the mandatory open offer to Polaris’ public shareholders. Combined, Virtusa and Polaris create a robust platform and a unique and compelling value proposition. We are enthusiastic about providing end-to-end solutions and services in banking and financial services, greatly expanding our addressable market and positioning us well to pursue larger consulting and outsourcing opportunities.”
Mr. Canekeratne continued, “I would also like to congratulate Jitin and Raj on their respective appointments. Their unparalleled industry expertise, leadership skills, and proven track record of driving business growth will be invaluable as we embark on our next phase of expansion.”
