LONDON, UK: Bank of Georgia Group PLC (BOGG), a leading banking and investment group in Georgia, announced on Monday that it has agreed to acquire 100% of Ameriabank CJSC, a leading universal bank in Armenia, for approximately $303.6 million in cash.
The acquisition, which is subject to shareholder and regulatory approvals, will significantly enhance the Group’s presence and growth opportunities within a fast-growing and attractive market, with similar characteristics to Georgia.
BOGG believes that significant value can be derived from capitalising on opportunities within Armenia through this acquisition and by leveraging its experience and expertise as it integrates Ameriabank into the wider Group.
The acquisition price of $303.6 million represents a multiple of 0.65x net asset value as at 31 October 2023 and 2.6x P/E 2023. The transaction will be fully financed by surplus capital of the Group, maximising shareholder return while preserving the strong capital ratios of JSC Bank of Georgia (JSC BOG), the Group’s main operating entity.
90% of Ameriabank will be acquired upon completion of the acquisition, with a 10% shareholding to be retained by the European Bank for Reconstruction & Development (EBRD) subject to a Shareholders’ (Put and Call Option) Agreement.
The Board and Management of BOGG expect the acquisition to be immediately earnings per share (EPS) and return on average equity (RoAE) accretive, with JSC BOG maintaining a strong capital position. The Group’s dividend and capital distribution policy, subject to trading and prospects being satisfactory, will remain unchanged with a target pay-out ratio in the range of 30-50% of annual profits.
Mel Carvill, Chairman of the Board of Directors of Bank of Georgia Group PLC commented: “This transaction is a significant milestone for the Group and a new chapter in our strategic development. Through Ameriabank we are set to enter Armenia, one of the fastest-growing economies in the region. Ameriabank has a well-regarded and experienced management team, and I am delighted that they will stay on after the transaction is closed.
The Board believes this transaction will enable the Group to substantially increase scale and unlock additional growth opportunities as our impressive results in digitalisation, payments and customer franchise growth can be applied to Ameriabank’s further development. This transaction is immediately earnings enhancing, using the Group’s existing cash resources, with no dilution for existing shareholders. The Board unanimously views it as an excellent opportunity to create more value for our shareholders.”
Archil Gachechiladze, Chief Executive Officer of Bank of Georgia Group PLC commented: “Today we announced the proposed conditional purchase of 100% of the shares in a leading universal bank in Armenia. Ameriabank is a growing and profitable bank, that is top of mind locally, with a strong customer franchise. We see Ameriabank as an attractive platform to increase scale and further grow our business by translating some of the successes that the Group has already delivered in the Georgian market. I would like to thank Ameriabank’s team for their cooperation, and I look forward to working with them to unlock growth opportunities in one of the best-performing economies in the region.”