Virtusa Looks To New York For Latest Acquisition
Westborough-based Virtusa Corp.'s $28 million acquisition of a company that specializes in banking and finance consulting solidifies Virtusa's offerings in one of its strongest markets.
Virtusa already gets more than half of its revenues by providing IT-based business performance consulting in the banking and finance sector. But Krishan A. Canekeratne, Virtusa's chairman and CEO, is hoping the purchase of Alas Consulting of New York will give Virtusa access into major financial institution clients.
The move, which is Virtusa's third acquisition in as many years, will allow both companies to offer a broader range of services in the fast-growing sector.
Alas has expertise in consulting financial institutions on regulatory compliance, trading operations, program management and automation. But there was something missing from Alas's offering that Canekeratne believes Virtusa will be able to provide: implementation services.
"We believe there are extraordinary synergies between what Alas does and what we've been able to build," he said.
Expansion Opportunity
Alas works with clients to create new and streamlined ways of operating their businesses. Now, Virtusa's international staff of more than 5,000 workers, most of whom are IT consultants and engineers, will be able to provide the technical capabilities to implement solutions created by Alas.
Canekeratne sees the partnership as a win-win for Virtusa, Alas and clients.
It will also expand Virtusa's client base to include some of the larger financial institutions in New York that Virtusa has not worked with in the past.
Purchasing Alas fits in directly with Virtusa's priorities for acquisitions, Canekeratne said. Virtusa focuses on purchasing businesses that expand the company's geographic reach, that bring new industries into Virtusa's client pipeline or that allow Virtusa to offer new services.
Virtusa's previous acquisitions include its 2009 purchase of Insource for $7.3 million, which helped Virtusa expand into the insurance consulting market.
In 2010, the company bought ConVisa Consulting for $24.8 million.
Healthy financial returns have fueled the company's acquisitions. Virtusa's revenues last year grew by 33 percent year-over-year to $218 million, while profits also increased from $12 million to $16 million.
Virtusa will bring on all 150 Alas employees and will offer them a combined $4 million worth of Virtusa shares.
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