Group-IB spinning off Russia, CIS business into separate co

MOSCOW. July 6 (Interfax) - The cofounders of cybercrime investigation and cybersecurity company Group-IB, investment firm Altera Capital and Cyberinvest LLC have established the company Adaptive Security Technologies LLC, into which they will spin off Group-IB's assets in Russia and the CIS.

The new company was registered on June 23, data in Russia's Unified State Register of Legal Entities showed. It is 37.5% and 25% owned, respectively, by Group-IB cofounders Ilya Sachkov and Dmitry Volkov, 25% by Kirill Androsov's Altera Capital LLC and 12.5% by Tatyana Polischuk's Cyberinvest LLC.

The CEO of Adaptive Security Technologies is Valery Baulin, who headed cybersecurity services at Group-IB, where he has worked since 2010. He previously headed the Computer Forensics Laboratory.

The new company has been created as part of the process of spinning off Russian assets from the group's international business, which will take about another six months, Group-IB said in a press release on Wednesday.

A new, completely autonomous entity has been created to work in Russia and the CIS, control of which has been transferred to local management, and the business in Russia and the CIS will develop independently from now on, the company said.

The transfer of the business in Russia and the CIS to a separate legal entity means complete separation of the financial flows of Group-IB's Russian and international assets. Russian revenue will be spent completely on developing Group-IB's local business.

The company's press service told Interfax that Adaptive Security Technologies will operate under the Group-IB brand, and the holding company and Russian legal entity will maintain an "exchange of data about threats needed to improve the quality of products and protect clients in all regions" where the group has a presence.

Group-IB Global Private Ltd currently still wholly owns Group IB Service LLC, which in turn owns six companies. The largest of these companies by 2021 revenue are Trust LLC with 1.08 billion rubles, Group IB LLC with 457.2 million rubles and Group IB TDS LLC with 338.6 million rubles.

As part of the process of diversifying assets, Adaptive Security Technologies will become the owner of all the companies owned by Group IB Service LLC. The deal will be completed by the end of the week.

The ownership structure and composition of shareholders in global and local assets will also change over the next six months, Group-IB said.

Group-IB develops solutions for detecting and preventing cyberattacks, identifying fraud and protecting intellectual property on the Internet for customers from various countries. The company is a partner of Interpol and Europol. The company does not disclose its cumulative financial results, but Russia accounts for 40% of its business.

Group-IB cofounder and CEO Dmitry Volkov was cited as saying in the press release that the decision on diversification was made amid conditions of global and market uncertainty, and it should give the company greater market freedom and enable it to accelerate the development of its business in all regions where it has a presence.

In addition to Russia, Group-IB has regional divisions in the Asia-Pacific region (Singapore), Middle East (Dubai) and Europe (Amsterdam). They will stay under the management of the Group-IB Global Private Ltd headquarters that were opened in Singapore in 2019. The shareholder structure of the Singapore-based Group-IB has not been disclosed.

It was reported in 2016 that Qiwi cofounder Andrei Romanenko's Run Capital and Altera Capital each acquired 10% of Group-IB. Group-IB management, including Sachkov and Volkov, retained the other 80%.

Sachkov has been under arrested in Russia on treason charges since September 2021. The company said he is innocent. After his arrest, Volkov, who previously served as chief technology officer, took over management of Group-IB.

Group-IB's press service told Interfax that, under Article 47 of Russia's Criminal Procedural Code, Sachkov, like any accused person, has the right to manage his equity interests and any other assets by notarizing his decisions.