BVCP Acquires 9% of 1C for USD 200 mln

Moscow-based Baring Vostok Capital Partners (BVCP) has acquired a 9 percent equity stake in Russian software development and distribution company 1C at the cost of USD 200 mln; the announcement was made at a 1C partnership seminar. The funding will be used to for asset acquisition and further development of joint enterprises. Because of foreign investment restrictions, 1C will retain control of the licensing part of the business. 1C head Boris Nurgaliev also indicated that an IPO float may be a part of their future plans.

1C (www.1c.ru)
1C is one of Russia’s leading software development, publishing and distribution companies. Headquartered in Moscow, the company operates in 100 cities and employs 700 people. Known primarily for its games development, 1C also dominates the Russian business software market with its 1C:Enterprise, an ERP solution catering to small and medium-sized businesses, that enjoys an enormous market share. Founded by Boris Nurgaliev in 1991, the company posted USD 600 million in sales revenues in 2010 and is expected to exceed that by 20 percent this year.

Baring Vostok Capital Partners (www.bvcp.ru/en)
Baring Vostok Capital Partners is a Russian private equity firm founded in 1994 that operates locally as well as in countries like Kazakhstan, Ukraine and other former Soviet Union states. Target companies typically have minimum annual sales of USD 30 mln, a gross internal ROI of at least 35 percent and projected cash nvestment returns of not less than three times. Their holding period is normally about 4-5 years, with an exit strategy that involves either the sale of shares to strategic investors, via a stock exchange or an MBO.