The European Bank for Reconstruction and Development has loaned telecom firm Datagroup $65 million to help it buy Volia, the country’s leading cable television operator.
Belonging to Horizon Capital, a private equity firm investing in businesses in Ukraine and Moldova, Datagroup will merge with Volia once the acquisition is complete.
The companies haven’t disclosed the final cost of the acquisition, which may be more than $65 million.
The merger’s final date hasn’t been specified either, but the companies announced they expect to generate over $130 million in revenue once the acquisition is signed, which would make this entity the leading company in Ukraine’s digital services.
Volia is the second largest internet provider among Ukraine’s 1,500 internet companies, but customers’ reviews often complain about the network’s poor quality.
Matteo Patrone, EBRD’s managing director for Eastern Europe and the Caucasus, believes Ukraine’s shattered internet market will benefit from this merger, which is why the EBRD provided its largest investment in local telecom to date.
“The consolidated and much stronger entity will be able to invest in better internet and TV services which will benefit individual consumers and businesses,” Patrone told the Kyiv Post on April 20.
The EBRD loan will also attract more investors to Ukraine’s digital sector, according to Lenna Koszarny, CEO of Horizon Capital.
“The success of Datagroup and Volia will serve to promote Ukraine’s investment attractiveness and ultimately bring more foreign direct investment to the country,” Koszarny said in the press release on April 19.
Datagroup promised the Kyiv Post to send more information about the merger but didn’t reply by publication time.
Volia revenues jumped from $13 million to over $400 million between December 2020 and the beginning of 2021, according to the Ukrainian financial analysis website Zoom.info.
Horizon Capital, Datagroup’s owner, manages over $850 million in assets from investors in Ukraine and Moldova, with a global capital base exceeding $350 billion.
Horizon Capital already covers a wide range of Ukraine’s fast-growing, export-oriented companies in information technologies, light industry, e-commerce, consumer goods and financial services.
The private equity firm has already backed tech companies Genesis and Intellias, biscuits producer Yarych, drug delivery service Liki24, and Makeup Group, a European player in the e-commerce market for beauty products, among others.
