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US-based IT major Virtusa Corporation is reportedly planning to acquire Chennai-based Polaris Consulting and Services Ltd in a deal worth $350 million (Rs 2,310 crore).

The Massachusetts-headquartered IT company's M&A discussion with Polaris is regarded as a step towards cementing its "offerings" and gain access to new clients in banking and financial services, The Times of India reported.

"Polaris has the potential to fill gaps in Virtusa's portfolio and position itself as an end-to-end digital transformation partner," said Hansa Iyengar, analyst in London-based IT research firm Ovum.

Polaris is expected to finalise the acquirer shortly as "negotiations were fairly advanced," said a source familiar with the development.

 Fiserv, Genpact, Tech Mahindra are among other "possible suitors", according to the report.

Arun Jain, chairman of Polaris Consulting and Services, holds 29% stake in the company, while Rohatyn Group (formerly Citi Venture Capital International) has 19% stake. Billionaire investor Rakesh Jhunjhunwala also acquired a 4.8% stake in the company.

Citigroup is the largest client for Polaris accounting for nearly 35% of its revenue.

"Polaris, which counts Citigroup as top client, could find a potential suitor in Virtusa with strong footprint in consumer banking, treasury and capital markets," said analysts.

With JP Morgan Chase, British Telecommunications and AIG Global Services as top clients, Virtusa earned $479 million in revenues last fiscal year and is sitting on a cash pile of $180 million.

"Virtusa wants scale and access to a new client base," Peter Bendor Samuel, CEO of US-based Everest Group said

"They have a demonstrated ability to grow services, have a young aggressive talent base and should be able to revitalize a somewhat tired and dispirited business. It's also good timing for Polaris as valua tions for this are high," he said.

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