October 25, 2006 at 16:50Baring Vostok bought all of Ozon
Almost 100% of the shares of the Ozon online store are now in the hands of one owner - the Baring Vostok Capital Partners Private Equity Fund (BVCP). The Russian holding company PPE Group , the former owner of a controlling stake, not only sold BVCP 50% and 1 share of the online store, but also bought 40% of its own shares from this company. According to Vedomosti , coming from a source in investment circles, the PPE Group was preparing a deal specifically for the repurchase of shares in its company.
“Ozon.Ru turned out to be a bargaining chip in a larger deal,” the newspaper quoted the expert as saying that the current owner of the online store was already his majority shareholder until 2002, before transferring part of his stake to PPE Group. “In this way, BVCP simply returned the package it had before,” say people familiar with the situation.
PPE Group, as Vladislav Kochetkov, head of the Finam Information Technologies Fund press service told Khabrahabr, probably only exchanged shares without making additional payments: 40% of PPE without Ozon.Ru will cost about the same as 50% online store. According to the expert, 40% of PPE can be estimated at $ 60-70 million, and "this amount is quite comparable with the cost of Ozon.Ru as an independent asset."
The PPE Group explains the deal in a slightly different way. According to Anna Ganeyeva, director of communications, the holding decided to focus on the main business - distance selling catalogs. She added that private equity funds rarely invest for more than 3-4 years - investments in the PPE Group came from BVCP in 2001. With the sale of Ozon.Ru, the company will not abandon e-commerce, and will begin to invest in the promotion of the "Home" store through which exclusively sold products of the same catalog brand are sold. The Finam expert sees this business as more profitable, although less promising than sold. “However, without Ozon.Ru, the company has become less interesting for investors,” he adds. “Most likely, she will have to give up the IPO.”
According to the results of 2005, Ozone’s turnover was determined at $ 19.3 million, despite the fact that the bulk of sales were books (43.4%), video (25.1%) and audio products (7.8%). The new owner of the online store considers his purchase a success. Experts say that perhaps in a year this business will cost twice as much.
“Probably, the fund is ready to invest significant amounts in the further development of Ozon.Ru,” said Vladislav Kochetkov. In his opinion, the sale could have been caused by the contradictions between BVCP and PPE regarding the issue of additional investments in the online store. Kochetkov also noted that, most likely, BVCP will increase the capitalization of Ozon.Ru, preparing it for sale to one of the western players - for example, Amazon.
“Ozon.Ru turned out to be a bargaining chip in a larger deal,” the newspaper quoted the expert as saying that the current owner of the online store was already his majority shareholder until 2002, before transferring part of his stake to PPE Group. “In this way, BVCP simply returned the package it had before,” say people familiar with the situation.
PPE Group, as Vladislav Kochetkov, head of the Finam Information Technologies Fund press service told Khabrahabr, probably only exchanged shares without making additional payments: 40% of PPE without Ozon.Ru will cost about the same as 50% online store. According to the expert, 40% of PPE can be estimated at $ 60-70 million, and "this amount is quite comparable with the cost of Ozon.Ru as an independent asset."
The PPE Group explains the deal in a slightly different way. According to Anna Ganeyeva, director of communications, the holding decided to focus on the main business - distance selling catalogs. She added that private equity funds rarely invest for more than 3-4 years - investments in the PPE Group came from BVCP in 2001. With the sale of Ozon.Ru, the company will not abandon e-commerce, and will begin to invest in the promotion of the "Home" store through which exclusively sold products of the same catalog brand are sold. The Finam expert sees this business as more profitable, although less promising than sold. “However, without Ozon.Ru, the company has become less interesting for investors,” he adds. “Most likely, she will have to give up the IPO.”
According to the results of 2005, Ozone’s turnover was determined at $ 19.3 million, despite the fact that the bulk of sales were books (43.4%), video (25.1%) and audio products (7.8%). The new owner of the online store considers his purchase a success. Experts say that perhaps in a year this business will cost twice as much.
“Probably, the fund is ready to invest significant amounts in the further development of Ozon.Ru,” said Vladislav Kochetkov. In his opinion, the sale could have been caused by the contradictions between BVCP and PPE regarding the issue of additional investments in the online store. Kochetkov also noted that, most likely, BVCP will increase the capitalization of Ozon.Ru, preparing it for sale to one of the western players - for example, Amazon.