NYC firm invests $108M in Virtusa

Virtusa CEO Kris Canekeratne

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By Grant Welker

A year after making a major investment in an India information technology firm, Westborough's Virtusa then got a major investment of its own in May: a $108-million buy from a newly formed New York investment firm.

Virtusa, a publicly-traded IT company, has said it plans to use the proceeds from Orogen's purchase to repay about $81 million on a loan, make $30 million in stock repurchases, and for general corporate purposes. Executives couldn't be reached for further comment.

Just last year, Virtusa completed a $166-million stock purchase giving it a majority interest in India-based Polaris Consulting & Services, creating a global provider of IT services to the financial industry. Virtusa now has 50 offices across North America, Europe and Asia.

Virtusa reported $859 million in revenue in the budget year ending March 31, a 43-percent increase over the prior year thanks in part to the Polaris deal. Despite the soaring revenue, however, the fiscal 2017 net income of less than $12 million paled in comparison to nearly $45 million the previous year. The company said it expects revenue to continue rising this year, hitting $920 million to $950 million.

If Virtusa is looking to jumpstart higher profitability again, Orogen may play a key role.

Orogen was formed just over a year ago, in May 2016. The private company said it would make strategic investments in financial services companies and related firms, but so far, Virtusa is its only announced investment.

Orogen was created by its CEO, Vikram Pandit, and another investment firm, Atairos, which says it has more than $4 billion in capital. Atairos, which itself has acquired the college sports marketing firm Learfield. In June, the company announced an unspecified investment in the entertainment chain Bowlmor.

Pandit, a new Virtusa board member as part of Orogen's investment, is a former CEO of Citigroup with 35 years of experience in financial services.