QPR Software acquires its Russian reseller's business operations
QPR Software Plc acquires the business operations of its reseller Trodos and consulting partner United Project and Services Group (UPSG) in Russian Federation and CIS countries. Acquired business operations comprise all QPR software related customer contracts, solutions, and intellectual property rights in Russia and CIS countries.
The operations will be transferred to a joint venture QPR CIS, which will start operations in January 2010 and will control all QPR related business activities in Russia and CIS. QPR will own 80 % and the sellers 20% of the shares in the joint venture. The price for acquired business operations is estimated to be approximately EUR 460 thousand. The final price will be based on QPR CIS´s earnings before depreciation, interest and tax (ebitda) in 2010. The payment will be made in February 2011 in cash (62.5% of the total consideration) and using QPR Software Plc´s treasury shares (37.5% of the totalconsideration). QPR estimates that the deal will have a positive impact on its earnings per share in 2010.
QPR and the sellers have also agreed on call and put options for the 20% of the shares of QPR CIS held by the sellers to be exercised in January 2014 the earliest. QPR and the sellers have agreed the consideration for the shares to be higher of the following alternatives:
- 20% of 5.5 times ebitda of QPR CIS for the financial year of 2013, or
The sellers will join QPR´s local Russian operations in Moscow. Trodos´s principal shareholder Mger Parunakyan is appointed General Director and UPSG´s principal shareholder Ilya Shappo is appointed Service Director. The majority of employees in Trodos and UPSG will join QPR.
Russia was the largest export market for QPR Software in the first nine months of 2009. The acquired business operations had net sales of EUR 0,8 million in 2008, of which EUR 0,45 million was booked in QPR Software Plc´s net sales as license and maintenance sales.
“This arrangement provides us a direct access to our end-customers in one of our key markets. The Russian market for performance and process management software is expected to grow significantly in the coming years. The large Russian economy, generally large organization sizes and widely endorsed need for developing management practices create a lot of possibilities for us both in private and public sector”, says QPR Software´s CEO Jari Jaakkola.
“We believe this arrangement strongly supports the growth of QPR´s business in Russia and CIS countries. QPR´s software products have had a great reception in the Russian markets and we already have many leading large organizations as our customers”, says Mger Parunakyan.
“Establishment of QPR´s local operations in Russia will further increase our service support for our customers´ large system roll-outs. It also supports the sales of our solutions for performance management, personnel motivationsystem, health care management system, process management and other solutions”, continues Ilya Shappo.
QPR customers in Russia and CIS countries include e.g. Bercut, Econika, IRKUT, KazMunayTeniz, Kazzinc, Kyivstar, LEK, City of Moscow, MTS (the biggest mobile operator), Nestlé Russia, Probusinessbank, SIBUR, RailTransAuto, TNK-BP and VSMPO-Avisma.
About QPR Software Plc:
QPR SOFTWARE PLC