Pursuant to the decision taken by the Company's Board of Directors on 25 October 2017, as earlier reported at: https://corp.megafon.com/investors/news/capital_market_releases/20171026-0939.html, MegaFon has completed the acquisition of a 12.5% stake in Forpost LLC ('Forpost'), the holding company for Talmer LLC, a systems integrator and complex IT solutions provider in Russia, from its sole shareholder, Mr. Anton Cherepennikov.
The transaction will allow MegaFon to take an important step towards implementation of its digital strategy in the corporate and government sectors, as it will provide enhanced competencies in Information and Communication Technologies (ICT) and facilitate the delivery of customized ICT turnkey projects to our clients.
In addition, the Acquisition will enable the Company to create a procurement alliance with Talmer LLC, whereby the latter will act as the procurement partner for MegaFon and its subsidiaries and will help to achieve economies of scale in many procurement areas.
The consideration for the Acquisition was US$ 3.125 million, paid in rubles on 26 December 2017. MegaFon has also obtained an option (i) to buy an additional 12.5% stake in Forpost within the 12-month period from the completion of the Acquisition at fair market value, but not to exceed the amount of the consideration paid for the initial 12.5% stake, and (ii) to sell its entire interest back to Mr Cherepennikov at any time depending on the performance of the procurement alliance or under certain other conditions set forth in the transaction materials.
Anna Serebryanikova, Chief Operating Officer of MegaFon, commented: 'The acquisition of a stake in Forpost is in line with our digital strategy for B2X aimed at developing digital ICT expertise and offering complex IT and integrated solutions to our corporate and government clients. Also, in line with our ongoing focus on operational excellence, the Forpost acquisition will help us make our procurement process more competitive and efficient.'
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Notes to Editors
MegaFon PJSC is a leading Russian integrated telecommunication service provider, operating in all segments of the telecommunications markets in Russia, and in the Republics of Abkhazia, South Ossetia and Tajikistan. MegaFon is a recognized market leader in the provision of mobile data services, was the first operator in Russia to launch commercial operation of a third generation (3G) network and was the first operator in the world to launch commercial operation of an LTE-Advanced (4G) data network. MegaFon is traded on the Moscow Exchange and the London Stock Exchange under the symbol MFON. Additional information about MegaFon and the products and services provided by MegaFon can be found at: http://www.megafon.ru.
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