Participate in the growth of this developed player through acquisition and incorporation of other providersThe Business
The Company is Moscow’s sixth largest Internet provider offering broadband, digital TV, and phone services to residential and corporate users. The Company was founded by a management team with a successful track record of multiple exits in this sector, who have reinvested proceeds from the most recent trade sale to build a subscriber base approaching 50,000 users within just two years.
Despite the effects of economic crisis, the Company is without debt and is solidly profitable and growing at thirty percent per annum with EBITDA margins exceeding forty percent.
Market
The management team has a track record of successful exits and it has now identified several acquisition targets. The Company is seeking to partner with a sophisticated financial investor who can contribute financial resources and expertise towards a clear growth strategy. With such an investor the Company can focus on a series of acquisitions and potential mergers with smaller players and eventual strategic acquirer.
Unlike the majority of other major cities around the world, the Moscow Internet market is still highly fragmented and growing at substantial rates. The penetration rates in Russia remain several times below the European or North American average. In addition to existing players, several companies have entered the market including a recent acquisition by Virgin Group.
An investor will benefit from the impact of partial leverage in acquisitions, strong growth, and the potential for multiple arbitrage opportunities from the difference between the multiple paid for small acquired ISPs and the exit multiple for the developed player.
Sector: Information TechnologySegment: InternetRegion: RussiaFinancing Size: $5m to $20mContact: Alexander Prokhorov
Company: Joule Capital ManagementTelephone: +44 20 3318 2676Email: [email protected]