Virtusa founder and CEO Kris Canekeratne to exit after 25-year run

Virtusa Co-Founder and CEO Kris Canekeratne

www.crn.com: Virtusa Co-Founder and CEO Kris Canekeratne will leave this summer after growing the IT services provider to $ 1.3 billion in sales over the past quarter century.

The Southborough, Mass.-based company, No. 38 on the 2020 CRN Solution Provider 500, said Canekeratne, 55, will exit both the Chairman and CEO roles by 30 June, less than 10 months after Virtusa was acquired by Baring Private Equity Asia (BPEA) for $ 2 billion. Virtusa’s board of directors has initiated the search for a new CEO and expects to finalise its selection in the coming weeks, the company said.

“With the added strength of BPEA’s ownership, the impressive performance of the business, and the strength of the leadership team we have in place, I’ve decided that it’s the right time for me to explore my next chapter,” Canekeratne said in a statement.

Canekeratne will be replaced as Chairman of Virtusa’s board on 15 May by Sander van ‘t Noordende, 57, who left Accenture at the end of 2019 after more than 32 years with the company, No. 2 on the 2020 CRN Solution Provider 500. Van ‘t Noordende spent his final six years as chief executive of Accenture’s products practice but was passed over for the CEO role when the company selected Julie Sweet instead.

“I am delighted to join the Virtusa Board as Chairman,” van ‘t Noordende said in a statement. “Virtusa is an exciting company with great clients and people, well positioned for a world in which digital business will be the norm.”

Canekeratne founded Virtusa at the start of 1996, has served as the company’s Chairman since its inception, and held the CEO role from 1996 to 1997 and again from 2000 until the present. He took Virtusa public in 2007 and agreed in 2015 to the $ 270 million purchase of up to 75% of 7,650-employee Indian Banking Giant Polaris, which had Citi, J.P. Morgan, HSBC and Barclays as clients.

Virtusa had nearly 23,000 employees globally as of March 2020 and derived just over half of its sales from application outsourcing, with the remainder coming from consulting services, according to regulatory filings. Nearly three-quarters of Virtusa’s revenue is generated in North America, with 17% coming from Europe and 9% coming from the rest of the world, regulatory filings said.

Canekeratne earned more than $ 8.2 million in total compensation during Virtusa’s final year as a publicly traded company, which was in line with his $ 8 million and $ 8.8 million compensation packages in fiscal 2019 and 2018, according to regulatory filings. He also co-founded eDocs, an electronic bill presentment and payment technology provider that was acquired in 2004 by Siebel Systems (now part of Oracle) for $ 115 million.

“Kris’ entrepreneurial spirit, passion and vision helped to build Virtusa into the IT Services and Digital Engineering powerhouse that it is today,” BPEA Managing Director Jimmy Mahtani said in a statement. “He led Virtusa through a period of strong growth and has been devoted to our company and its employees and committed to providing leading solutions to our clients.”

Van ‘t Noordende, meanwhile, earned $ 6.4 million in his final year with Accenture in total compensation, slightly higher than his $ 6.2 million and $ 6 million compensation packages in fiscal 2018 and 2017, according to regulatory filings. Along with Virtusa, he is also an independent director on the boards of infrastructure software company Micro Focus, infrastructure consulting firm AECOM, and HR services provider Randstad.

“Looking to the future, we are pleased that Sander will join Virtusa as Chairman of the Board,” Mahtani said in his statement. “Virtusa is well-positioned for strong future growth with an exceptionally strong management team, market position, IT Services and Digital Engineering solutions.”