Press releases


MAIL.RU GROUP LIMITED Acquisition of 48% of Vkontakte

Dubai, UAE – September 16th, 2014. Mail.Ru Group Limited (LSE: MAIL, hereinafter referred to as "the Company"), one of the largest Internet companies in the high-growth Russian-speaking Internet market, today announces the acquisition of the remaining 48.01% of VK.Com Limited (VK).

The acquisition of the 48.01% was closed on September 16th 2014. The shares were acquired from Blesmir Development Limited and Palagon Limited. As a result Mail.Ru now has a 100% economic interest in VK. Accordingly, Mail.Ru will now fully consolidate VK.

The acquisition of the 48.01% is an all cash deal for a total consideration of $1.47bn. Taking into account the price paid for the other 52% of VK since the first investment in 2007 this makes the total acquisition cost of VK $2.07bn. funded the deal with its existing cash and with a RUB 22.2bn ($585m at CBR rate) 11.5% fixed rate 4 year loan from Gazprombank.

UCP, Mail.Ru and Pavel Durov have also agreed that simultaneous with this acquisition all the outstanding litigation, and claims concerning VK and related matters between these parties will be dropped with immediate effect.

In 2013 VK had revenue growth of 14% to RUB 3.8bn with EBITDA growth of 32% to RUB 1bn and net profit of RUB 53m. In H1 2014 VK had revenues of RUB 2.0bn with EBITDA of RUB 694m and net income of RUB 248m.

The strategic rationale for the consolidation of VK with Mail.Ru is very clear and with over 92m MAU (comScore, worldwide, July 2014) VK fits well inside of the wider Mail.Ru Group.

Commenting on the acquisition, Dmitry Grishin, Co-Founder and CEO of Mail.Ru Group, said:

“We are happy to announce the acquisition of 48,01% of VKontakte stake from UCP. The consolidation of 100% of VK and the termination of all outstanding shareholder disputes will allow focus on the product and its further development. We respect the successful results driven by VK's team and do not plan any significant changes in the team or the product itself. Moreover, we are ready to give the current team an opportunity to realize their plans and initiatives.”

Commenting on the acquisition, Victoria Lazareva, Partner of UCP, said:

“We are satisfied with the transaction and confirm full settlement and release of the mutual claims between the parties. We wish further successful growth for the business of VK.”

Commenting on the acquisition, Pavel Durov said:

“I welcome the decision of my former partners to abandon their claims toward Telegram and to transfer the American entities under my control. For my part I acknowledge the dismissal of claims against UCP and congratulate all parties involved in the settlement.”