AFK Sistema to pay $82.5 mln for 38.75% of NVision
MOSCOW. Jan 23 (Interfax) - AFK Sistema has signed an agreement to buy 38.75% stake in systems integrator NVision Group from CJSC RegionKapital, which is part of Konstantin Malofeyev's Marshall Capital, and several other shareholders, Sistema said in a statement.
The deal's overall cost is $82.5 million, and it is expected to be completed by the end of the first quarter, the company said.
The Federal Antimonopoly Service approved the deal at the end of December, 2013.
Sistema's wholly owned subsidiary, Sistema Telecom Assets LLC, will pay $37.5 million in cash, and $45 million in shares. A source familiar with the conditions of the deal said that RegionKapital will receive 0.35% stake in Sistema in exchange for 25% stake in NVision. Malofeyev, a former minority shareholder of OJSC Rostelecom , will therefore become a minority shareholder of Sistema.
Malofeyev became a co-owner of NVision in the fall of last year, buying 25% of the company from its founders. The Vedomosti newspaper quoted a source at Sistema as saying Malofeyev could be invited to work at the holding.
AFK Sistema owns 50% plus 0.5 of a share of NVision through subsidiary OJSC RTI , and is consolidating 88.75% as a result of the deal. The 50%+0.5 package allowed Sistema to consolidate the financial results of NVision, but was not a controlling stake. Buying out the company's co-owners will allow Sistema to gain majority in the company's board of directors.
"To develop the company's business, it is necessary to consolidate management. For that reason, Sistema is increasing its stake," a Sistema representative told Interfax. The representative did not comment on the possibility of increasing the company's stake to 100%.
AFK Sistema said it did not yet have any plans to change NVision's management, and the company's president, Anton Sushkevich, will remain a co-owner, a source close to the company told Interfax.
In 2012, RTI bought 50% plus 0.5 shares of NVision, estimated to be worth 20 billion rubles, not factoring in debt. The current deal estimates the company to be worth nearly a third of that - $212.9 million, or 7.2 billion rubles.
NVision provides services in systems integration, as well as in communication network construction and intellectual systems creation. The company's main long-term client has been Rostelecom, but after the state-run company changed its management, NVision started winning its tenders much less frequently. Rostelecom said that NVision accounted for 32% of the operator's spending in the first half of 2013, and 25.7% in January-September.
NVision forecasts that Rostelecom accounted for no more than 15%-20% of the company's overall orders portfolio in 2013.
NVision's key customers are RZD, Sberbank , Alfa Bank , Vimpelcom , Norilsk Nickel , Severstal , Inter RAO UES and others.
The SPARK Interfax database shows that NVision Group revenue to Russian Accounting Standards was 31.4 billion rubles in 2012, compared to 17.7 billion the previous year. The company has not disclosed its forecast for 2013.