Virtusa buys Swedish firm for $20M

PHOTO | Matt Volpini Kris Canekeratne, chairman & CEO, Virtusa Corp.

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Virtusa Corp. of Westborough has bought a Swedish consulting and IT service provider in a deal that could wind up being worth $24 million.

Virtusa said it purchased Stockholm-based TradeTech Consulting Scandinavia AB, which provides treasury and asset management to Nordic corporation and financial institutions, for $20 million in cash. The remaining $4 million is contingent on TradeTech satisfying revenue and profit milestones in 2014.

Virtusa will pay for the acquisition through a public offering of 2.3 million shares of stock, currently valued at $36.71 per share. Underwriters will also have the option to purchase an additional 345,000 shares.

Proceeds in excess of the purchase price are expected to be used to finance other possible acquisitions and expansions, the company said.

Virtusa said it bought TradeTech due to its presence in the Nordic market and the expertise of its 60 employees in asset management, treasury services and technology. This will enable Virtusa to offer a broader set of services to its clients, the company said.

“We are pleased to join the Virtusa team and believe this is a tremendous opportunity to extend our services globally,” said Joakim Wiener, CEO of TradeTech.

Virtusa expects TradeTech to contribute $4.2 million in revenue in the winter of 2014. The acquisition is expected to slightly boost Virtusa’s profits between now and March 2015, the company said.

“This is an important step in establishing Virtusa in the Nordic countries and providing a broad set of best-in-class consulting and outsourcing services to the region,” Virtusa Chairman and CEO Kris Canekeratne said in a statement.

A $25 million revolving credit line from JP Morgan Chase is being used to fund this transaction, which will be repaid through the sale of additional Virtusa stock.