BackUS IT firm to expand in India with funds from IPO
US IT firm to expand in India with funds from IPO
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Colombo: Massachusetts-based Virtusa Corp., an information-technology services firm with operations in India and Sri Lanka, plans to raise $92 million (Rs394 crore) through a NASDAQ listing.
The company filed for a public issue last Friday with the US Securities and Exchange Commission, a statement said.
The firm hopes to use $30 million of the proceeds to fund the construction of a new facility on its planned campus in Hyderabad, India, over the next three years.
The balance amount will be used for working capital and other general corporate purposes, including financing the expansion of its global delivery centres in Colombo and Chennai, India.
“The proceeds would also be used to hire more people, sales and marketing activities, capital expenditures, and possible strategic alliances or acquisitions."
Virtusa did not say how many shares will be offered in the initial public offering (IPO) or at what price.
Virtusa, co-founded by its Sri Lankan born chairman and Chief Executive Officer Kris Canekeratne, also has offices in the US and the United Kingdom.
The company has applied to list the stock under the symbol ‘VRTU’ on the NASDAQ Global Market.
“We have experienced compounded annual revenue growth of 47% over the four-year period ended 31 March 2006,“ a company statement said.
“We may use a portion of these net proceeds (of the IPO) to expand our business into new geographic locations. We may also use a portion of these net proceeds to expand our current business through strategic alliances involving, or acquisitions of, other complementary businesses or technologies," it said.
However, it said it had no agreements or commitments for any specific acquisitions at present.
Virtusa reported a net profit of $15.5 million for the nine months ended 31 December 2006, compared with a net loss of $625,000 dollars in the same 2005 period.
The company also said that under its dividend policy it had never declared or paid cash dividends on its common stock and does not expect to pay dividends in the foreseeable future.
“We currently intend to retain all of our future earnings to fund the operation, development and expansion of our business. In addition, the terms of our credit facility prohibit us from paying cash dividends," the company said.
The underwriters for the offering were listed as JP Morgan, Bear Stearns & Co., Cowen and Co. and William Blair & Co.
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