Two funds managed by Da Vinci Capital Management — Da Vinci Private Equity Fund II L.P. and Da Vinci Pre-IPO — have invested in Softline, a Moscow-based international software licensor and IT service provider.
The news was reported last week by Russian business daily Kommersant based on exchanges with Softline top executives. The details of the transaction has not been disclosed, but Kommersant learned from sources close to the deal that it amounted to some $40 million.
Da Vinci Capital founder and managing partner Oleg Zhelezko said: “Companies providing value added cloud and IT services have among the highest growth rates globally, which spurs investors’ appetite. We believe in Softline’s high growth potential and found this investment opportunity particularly attractive in the perspective of an IPO.”
Softline’s founder and main owner Igor Borovikov is keeping control of the company, with existing shareholders Sovkombank and Da Vinci owning minority stakes.
“Our strategy is to pursue further growth through acquisitions in the BRICS countries and by increasing the share of service and cloud products in our product mix,” Borovikov commented.
The company is planning to close “over 20 acquisition deals in the BRICS countries,” said Softline Investment Director Elena Volotovskaya.
IPO prospects
Softline intends to go public on within three years. The company, which initially targeted the Hong Kong exchange, now says that the place and time of the IPO have yet to be determined.
Founded in 1993, Softline offers a broad range of services, including software, hardware, as well as cloud, security and IT consulting. The company gives access to the solutions offered by some 3,000 vendors. In 2015, its turnover exceeded $800 million while its EBITDA reached almost $40 million.
“Russia and neighboring countries account for 60% and 40% of the revenue respectively. The share of the neighboring countries will grow as the company is intensively expanding abroad by acquiring local players. When we go public, we expect our revenues to come from Russia, Latin America and Asia in similar proportions” said Volotovskaya.
Currently, the company is active in 28 countries.
With over $300 million under management, Da Vinci Capital has been operating in Russia and neighboring countries since 2007. Among its portfolio companies are Russia’s main electronic trading platform B2B-Center, one of Russia’s leading debt collection companies First Collection Bureau, online broker ITinvest and the fund management company ITI Asset Management.
Sources: Da Vinci Capital, Kommersant.
