MOSCOW, RUSSIA: Rostelecom PJSC, Russia’s national telecommunications operator, announced the acquisition of a 50.01% stake in BFT Holding, a leading supplier of turnkey solutions for development and integration of IT systems across Russia’s public sector.

The total value of the deal will not exceed RUB 1.650 billion. The proposed acquisition will be completed in three tranches before 2023 as the parties fulfil certain conditions.

The deal will strengthen Rostelecom’s leading position as the enabler of digital transformation in the public sector. BFT Holding will become part of the Rostelecom Group as its subsidiary, keeping key staff and competences unchanged.

BFT Group is Russia’s leading IT company and developer of software and project B2G and B2B solutions covering a significant national market share of 80 municipal authorities.

The product portfolio includes software solutions in critical state sectors such as finance and procurement, property and assets management, public services, social management, and employment. This range is complemented by leading solutions for businesses and a strong consultancy capability.

In 2020, BFT Holding posted a revenue of RUB 3.4 billion.

Mikhail Oseevskiy, President of Rostelecom, commented: “The acquisition of BFT is one of those targeted M&A deals that help strengthen the ecosystem of our public products as we continue to remain a strategic partner to the State.

The deal will help us expand Rostelecom’s business cluster of B2G digital services and solutions into new segments of public management and improve our capability to deliver state projects of any complexity and size.

It will also contribute to our internal consolidation of digital B2G competences at both national and regional levels, and provide further impetus to the breakthrough development of one of our five digital clusters as part of our ambitious Strategy 2025.”

PJSC Rostelecom is the largest integrated digital services and products provider, operating in all segments of the telecommunications market in Russia. The Company serves millions of households, state and private enterprises across the country.

Rostelecom is Russia’s undisputed market leader, providing high-speed Internet access and pay-TV. The total number of broadband users stands at over 13.5 mln users, it has more than 10.8 mln pay-TV customers, over 6.3 mln of which are subscribed to Rostelecom’s IPTV services. Tele2 Russia, a Rostelecom subsidiary, is a major player in the mobile market with the industry-leading NPS, a customer satisfaction benchmark. The joint mobile subscriber base is over 46.6 mln users.

Rostelecom is a key strategic innovator that provides solutions in the following fields: E-Government, cybersecurity, data-centres and cloud computing, biometry, healthcare, education and housing & utility services.

In 1H 2021, the Group generated RUB 270.5 bln of revenues, RUB 111.4 bln of OIBDA (41.2% of revenue) and RUB 23.0 bln of net income.

The Group’s stable financial position is confirmed by its credit ratings. Rostelecom has been assigned ‘BBB-‘ and ‘BB+’ international credit ratings by Fitch Ratings and Standard & Poor’s respectively, and AA(RU) by ACRA.