December 23, 2006 at 01:41Softkey found a non-core investor
Company DEPO Computers has announced the acquisition of online store software Softkey . “SoftKey’s business integrates seamlessly into DEPO Computers’s business, as this company sells programs that are installed on DEPO brand computers,” said Sergey Eskin, DEPO CEO. “The work of two companies in one chain will allow us to expand the list of software offered, improve the level of customer service and generate a significant increase in revenue coming to the company after the sale of a personal computer.”
DEPO is one of the largest Russian personal computer assemblers, part of IBS. Softkey store was created in 2001 by Felix Muchnik. Initially, the store was engaged in the distribution of shareware-programs (software that is downloaded for free, but paid registration is required for full use), and subsequently engaged in the sale of boxed software products. Representative offices are open in Israel, Poland and a number of CIS countries.
“Joining DEPO Computers will strengthen our company's capabilities in the field of physical electronic distribution and will allow us to take advantage of DEPO Computers' extensive experience in CRM and other web services,” commented Felix Muchnik. Softkey will continue its work as a separate structure, and Mr. Muchnik will remain its co-owner.
Although Softkey shows good financial results (last year its turnover amounted to $ 5 million), market participants recall that Mr. Muchnik has long been looking for investors. “To work according to the classical scheme, when the shareware-registrar is engaged in promotion of small developers, Softkey did not succeed,” says the president of LETA-IT CompanyAlexander Chachava. - In Russia, a private user is not ready to pay for software: Russian shareware developers are guided by the Western market, and compatriots often give their developments for free. As a result, 60% of Softkey’s turnover falls on the distribution of products of a number of the largest companies (ABBYY, Kaspersky Lab, etc.), which already cooperate abroad with large foreign registrars. And if these registrars enter Russia, Russian sales will be transferred to them as well. ”
The first bidders for the purchase of Softkey were just foreign registrars. In particular, intensive negotiations with Softkey were conducted by one of the largest participants in this market - Digital River. In the end, however, the Russian computer builder became the new investor. The amount of this transaction is not disclosed. Valery Gasratov, spokeswoman for the eHouse holding, does not rule out that, due to the prospects of the upcoming cooperation with Depo, Mr. Muchnik could give Softkey for free. “Softkey has received many new features, for example, integration of a special agent into the preinstalled software of Depo computers,” says Mr. Gasratov. “In this way, Softkey will be able to increase the number of its corporate clients, whose share is only 25% so far, and which are much more solvent than private ones.”
Depo will be able to diversify its business with the help of a purchase. “IBS, together with its subsidiaries, is going to conduct an IPO, and having a software business can increase its capitalization,” says Mr. Chachava. “Other IT companies that are preparing for an IPO, for example, Compulink and Asbis, are doing the same now.”
DEPO is one of the largest Russian personal computer assemblers, part of IBS. Softkey store was created in 2001 by Felix Muchnik. Initially, the store was engaged in the distribution of shareware-programs (software that is downloaded for free, but paid registration is required for full use), and subsequently engaged in the sale of boxed software products. Representative offices are open in Israel, Poland and a number of CIS countries.
“Joining DEPO Computers will strengthen our company's capabilities in the field of physical electronic distribution and will allow us to take advantage of DEPO Computers' extensive experience in CRM and other web services,” commented Felix Muchnik. Softkey will continue its work as a separate structure, and Mr. Muchnik will remain its co-owner.
Although Softkey shows good financial results (last year its turnover amounted to $ 5 million), market participants recall that Mr. Muchnik has long been looking for investors. “To work according to the classical scheme, when the shareware-registrar is engaged in promotion of small developers, Softkey did not succeed,” says the president of LETA-IT CompanyAlexander Chachava. - In Russia, a private user is not ready to pay for software: Russian shareware developers are guided by the Western market, and compatriots often give their developments for free. As a result, 60% of Softkey’s turnover falls on the distribution of products of a number of the largest companies (ABBYY, Kaspersky Lab, etc.), which already cooperate abroad with large foreign registrars. And if these registrars enter Russia, Russian sales will be transferred to them as well. ”
The first bidders for the purchase of Softkey were just foreign registrars. In particular, intensive negotiations with Softkey were conducted by one of the largest participants in this market - Digital River. In the end, however, the Russian computer builder became the new investor. The amount of this transaction is not disclosed. Valery Gasratov, spokeswoman for the eHouse holding, does not rule out that, due to the prospects of the upcoming cooperation with Depo, Mr. Muchnik could give Softkey for free. “Softkey has received many new features, for example, integration of a special agent into the preinstalled software of Depo computers,” says Mr. Gasratov. “In this way, Softkey will be able to increase the number of its corporate clients, whose share is only 25% so far, and which are much more solvent than private ones.”
Depo will be able to diversify its business with the help of a purchase. “IBS, together with its subsidiaries, is going to conduct an IPO, and having a software business can increase its capitalization,” says Mr. Chachava. “Other IT companies that are preparing for an IPO, for example, Compulink and Asbis, are doing the same now.”
