Page 111 - RPTRusFeb17

MegaFon, an unnamed representative of FAS told Ria Novosti on February 5, without disclosing the size of the stake. The shareholders of MegaFon, one of Russia's "big three" mobile operators, approved the acquisition of a stake in Mail.ru in January, the company said.MegaFon plans to buy 15.2% of Mail.ru capital (63.8% of voting shares) for $740mn from USM Group controlled by tycoon Alisher Usmanov. At the same time, USM also holds 56.32% stake in MegaFon.
Russia's internet service major Mail.ru fully acquired food delivery service Food Delivery Club for $100mn (€93.6mn) , Interfax reported on February 9. The delivery service was launched in 2009, and is currently connected to about 4,500 restaurants processing up to 20,000 deliveries daily, mainly via mobile applications, with the share of mobile order jumping 2.7-fold to 72%. Revenues of the service in the first six months of 2016 amounted RUB296mn (€4.7mn). Mail.ru mobile operations might be developed further after the sale of 15.2% of its shares to one of Russia's big three mobile operators MegaFon. Reportedly, any deal would still see MegaFon and Mail.ru continue operating as separate entities. Another option is that the companies will develop a commercial collaboration targeting mobile subscribers without any equity transactions. In October 2016, Mail.ru announced the acquisition of mobile games developer Pixonic for $30mn, paying $20mn up front in cash.
Luxoft has announced the acquisition of IntroPro, and engineering consultancy focused on telecoms and the media. According to IntroPro, it employs 498 engineers, which is about 5% of Luxoft's IT professionals at the end of September 2016. We believe that most of these employees are located in Ukraine, while the company’s clients, which include AT&T, DIRECTV and Verison, are mostly US-based. The deal contributes to Luxoft's recent diversification efforts by boosting its presence in North America and expanding exposure to the telecoms vertical. As of the latest reported quarter, which ended in September 2016, Luxoft generated $78,900 in annualised revenue per engineer. Given that IntroPro has a similar profile, analysts assume that it could generate between $50,000 and $75,000 per employee, which would imply $25-37mn of annual revenues, or 3-4% of Luxoft's top line. While the price of the deal has not been disclosed, analysts believe that IntroPro was likely priced at below Luxoft's current P/S multiple of 2.5x.
Russia's Severgroup, the main shareholder of steel major Severstal, made its first investment in the internet segment , acquiring a controlling stake in Remontnik.ru (Handyman.ru) from Dmitry Balakirev and Alexei Sapkin, Vedomosti daily reported on February 16, without specifying the amount of the deal. The group is ready to invest in new services, regional expansion, hiring new staff and marketing of the existing platform, a representative of Severgroup told the daily. Remontnik.ru was founded in 2007 and has a platform with over 130,000 registered freelance handymen and construction contractors, with over 300,000 deals mediated in the past nine years. It is planned to create a human resource platform based on the service, and develop HR management and training services, which could result in synergies for Severgroup's key metals segments. According to estimates of the RBC business portal, 25% of all construction and repair requests are made in the internet, while the whole retail construction market is estimated at RUB287bn (€4.7bn).
111 RUSSIA Country Report February 2017 www.intellinews.com