By April 6, 2015 Read More →

Virtusa Expands Infrastructure Management Services with Acquisition of Apparatus

Virtusa Corporation, a global IT services company that combines innovation, technology leadership and industry solutions to transform the customer experience, has acquired all the outstanding shares of Apparatus Inc., a leading provider of end-to-end IT infrastructure services headquartered in Indianapolis, Ind.

With over 200 employees, Apparatus provides consulting, service design and delivery of infrastructure management services, helping its clients improve the operational efficiencies of their IT investments.

The acquisition strengthens Virtusa’s growing Infrastructure Management Services (IMS) practice with the addition of Apparatus’ Kore Managed IT Solutions® platform. Virtusa will deliver remote infrastructure management (RIM) services from Apparatus’ RIM center. The combined entity will offer clients a stronger set of offerings that are sharply focused on simplifying their IT infrastructure and driving high levels of efficiency in IT operations.

Apparatus delivers its Kore Managed IT Solutions® through a technology platform supported by optimized processes and solution frameworks that allow Apparatus to proactively and cost-effectively manage IT infrastructure for its clients. The Kore platform includes cloud/virtualized infrastructure management; unified communication platforms; collaboration and content management; data management, backup and disaster recovery; and mobile device management.

Kris Canekeratne, chairman and CEO of Virtusa, said, “We are pleased to welcome the Apparatus team and clients to Virtusa. Apparatus brings superior infrastructure solutions that are complementary to Virtusa’s IT outsourcing capabilities. We believe there’s strong alignment between Virtusa’s software engineering DNA and Apparatus’ automation-first mindset to infrastructure management. This acquisition will help increase our total addressable market and allow us to deliver expanded IT outsourcing service offerings to our clients. In addition, this acquisition is an important step in strengthening Virtusa’s position as an end-to-end IT services provider, as we continue to capture larger transformational programs.”

Kelly Pfledderer, founder and CEO of Apparatus, said, “We are pleased to join the Virtusa team and believe this is a tremendous opportunity to deliver on Apparatus’ vision of globalizing both our delivery model and addressable market. Virtusa is committed to Apparatus’ presence in Indianapolis, as well as to expanding our global capabilities. With this transaction, we’ll further enhance our ability to provide exceptional technology solutions to our clients and channel partners while creating growth opportunities for our employees. We share a strong engineering and innovation culture and are laser focused on client success.”

Financial Overview of Transaction
Under the terms of the stock purchase agreement, Virtusa acquired all the outstanding shares of Apparatus for approximately $34.2 million in cash, as well as up to approximately $3.2 million in earn-out and contingent consideration based upon Apparatus’ full achievement of certain revenue and profit milestones for the fiscal year ending March 31, 2016. Virtusa has also agreed to issue an aggregate of up to $3.5 million in restricted stock awards from Virtusa’s stock option and incentive plan, not to exceed 93,333 shares, to certain Apparatus employees. The restricted stock awards will vest annually over a four year period.

For the fiscal fourth quarter ended March 31, 2015, Virtusa currently expects to incur approximately $200,000 of transaction expenses related to the acquisition of Apparatus.

For the fiscal year ending March 31, 2016, Virtusa management currently expects Apparatus to contribute revenue, including related synergy revenue, of approximately $34 million and to be approximately ($0.06) dilutive to Virtusa’s earnings per share on a U.S. GAAP basis. This is inclusive of approximately $600,000 of transaction expenses, as well as approximately $5.0 million of acquisition-related amortization of intangible assets, earn-out and contingent consideration, and stock based compensation. Virtusa management currently expects the Apparatus acquisition to be accretive to U.S. GAAP earnings per share for fiscal year 2017.


Posted in: News

Post a Comment

Your email address will not be published.

( required )

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>