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EDB Business Partner has entered into an agreement to purchase 60.1% of the Ukrainian IT company Miratech. Miratech is one of the leading companies in the Ukraine for IT services and the majority of its customer base is in the American and European markets. Following the acquisition of Miratech, EDB will have around 570 employees in the Ukraine.
“Acquiring Miratech will help to ensure that EDB will enjoy a powerful and aggressive position in the IT market of the future. This purchase will strengthen both EDB’s delivery capacity and its competitiveness, and I have every confidence in the work we are carrying out in the Ukraine”, comments Endre Rangnes, CEO of EDB.
The purchase of Miratech is a further step in EDB’s work on developing an offer for its customers that combines deliveries from its Norwegian activities with deliveries from cost effective countries. An increasing number of customers now expect and specify this form of delivery model and over a period of time EDB has worked intensively on establishing a model for Global Sourcing to meet these requirements. EDB already owns the IT company Infopulse in the Ukraine, which it acquired earlier this year.
“Together with Infopulse, Miratech will form the core of our Global Sourcing offer. We have high expectations for the effects of this new delivery model, both for EDB and for our customers”, adds Endre Rangnes.
More about the business acquired
Miratech was incorporated in 1989 and is the oldest IT company in the Ukraine. The company is one of the leading players in the Ukraine for IT services and outsourcing, and has 220 employees with a high average level of education and in-depth IT expertise. Miratech’s head office is in the Ukrainian capital Kiev, and the company also operates in Kharkov and Odessa in the Ukraine.
Miratech reports good profitability, and turnover grew in 2006 by over 35% to around USD 5 million. The company’s EBITA margin is in line with the margin reported by EDB. The activities are concentrated to a very large extent on sales to international customers outside the Ukraine. The USA and Europe account for 60% and 30% of sales respectively, with 10% of sales to the Ukrainian market. Miratech’s customers are principally IT companies and large systems integrators, and include Genesys, Siemens, and the Ukraine’s two leading telecom companies Kyivstar and MTS-Ukraine (formerly UMC). The company uses modern development methodology and holds both ISO 9001:2000 and Software CMM Level 3 certification. Miratech works with the most modern technology platforms.
More about the agreement
EDB is to acquire 60.1% of the business of Miratech from the company’s management, who will continue to hold 39.9%. EDB expects to pay between USD 4.2 million and USD 5.9 million for its interest in the company based on company’s performance. EDB also has a contractual option to acquire the remaining 39.9% of the share capital of Miratech. The purchase is conditional on the necessary approvals from the authorities and the satisfactory completion of the due diligence.
Binding agreements have been entered into with key individuals at Miratech to ensure their continuing involvement in the company. Miratech will operate as a separate company within the EDB group. The transaction is expected to be completed around the turn of the year, subject to the timing of final approval by the relevant authorities.