Virtusa Corp. has entered into an equity purchase agreement to acquire all of the outstanding shares of Fremont, Calif.-based eTouch Systems Corp. and India-based eTouch Systems Pvt. Ltd.

Virtusa completed the acquisition of California-based eTouch Systems on March 12 and expects to complete the acquisition of the India-based company in the next several days.

Virtusa has agreed to acquire the companies for about $140.0 million in cash, with up to an additional $15.0 million set aside for retention bonuses to be paid to eTouch management in equal installments on the first and second anniversary of the transaction.

Virtusa will use $70.0 million of a delayed draw term-loan from its existing credit facility and $10.0 million of cash on hand to make the payments due at closing.

Virtusa's management expects the companies to contribute revenue of approximately $5.0 million and to be about 4 cents dilutive to Virtusa's earnings on a GAAP basis. The acquisition is expected to be dilutive to GAAP EPS and accretive to non-GAAP EPS for the fiscal year ending March 31, 2019.

ETouch provides digital engineering, digital marketing, cloud, analytics and data security solutions to technology companies.

Citi acted as exclusive financial adviser to eTouch.