Vedomosti (Moscow) - July 27, 2005

raised a year ago
Media holding RBC wants to acquire controlling stakes in two IT companies that have not been disclosed yet. Market insiders believe that RBC will purchase a stake in Helios Computer, a PC engineering company.

Media holding RBC Information Systems (RBC) owns RosBusinessConsulting information agency, web-portal www.rbc.ru, business channel RBC TV, and provides IT services as well. In 2004, RBC's turnover was USD75.1m on net income of USD10.9m.

The main shareholders in the company are Alexander Morgulchik (22.21%), Dmitry Belik (21.03%) and German Kaplun (19.25%). 36.1 percent of the company's shares are floated on the RTS exchange and the MICEX.

RBC started preparations for the takeover a year ago. In June 2004, it made its secondary share offering, raising USD28.5m. RBC wanted to allocate 70 percent of this sum for financing acquisitions and the remaining 30 percent for funding new projects.

RBC says that one of its takeover targets is a system integrator and mobile content provider and another is an IT-company. Their overall value is estimated at USD30m-USD35m. 51-percent stakes in these companies were worth USD15m-USD17m, respectively. RBC is entitled to acquire the remaining 49 percent within the next three years. Overall revenue of the two companies is estimated at USD50m and their net income, according to RBC's estimates, is USD6m-USD7m.

Analysts with Aton Capital brokerage consider the transactions to be advantageous for RBC. However, they do not have a clear idea about the acquisition targets. Aton Capital reported that the transaction could boost RBC's revenue by 31 percent to USD159m in 2005. Net income is forecast to jump 39 percent to USD25m thanks to the acquisition, which is expected to result in a 12-percent increase in the valuation of RBC shares - to $5.02. EBITDA margin is forecast to decrease to 30 percent from 31 percent.

The fact the a year has passed after the announcement on the purchase and the transaction has not been accomplished arouses worries about RBC's corporate governance practices, since raised funds have not been working for a year, Alfa Bank analysts say. Meanwhile, investors show their interest in RBC securities. This is one of the most heavily traded securities of the Russian telecommunications sector, they say. According to Aton Capital's estimates, RBC securities almost doubled their value over the past year rising to $4.45.

RBC will successfully invest its funds, experts with Delta Private Equity Partners say. The ITS market is fragmented now and the player that launches consolidation processes on it will benefit the most.

According to data from an unnamed participant of the IT market, RBC is in talks to acquire a controlling stake in Helios Computer engineering company. RBC General Director Yuri Rovensky and chairman of Helios board of directors Azer Badalov could not confirm or refute the rumors. According to Badalov, Helios does not take part in РR campaigns and all information about its financial results is not to be freely accessed. An RBC shareholder, German Kaplun, was cited by the Vedomosti daily as saying that the company will announce the purchase in the middle of September.

Some IT market players say USD15m-USD17m is too much for Helios. According to the director of the IТ company, Helios is currently focusing on computer engineering and is not in the top-five. Kraftway President Alexei Kudryavtsev believes Helios' annual turnover nears USD20m. The company is not a leader in any segment of the IT market, he stressed.