MOSCOW, RUSSIA: Etalon Group Plc, one of Russia’s largest and longest-established development and construction companies, introduced that its Board of Directors has reviewed and approved the strategic acquisition of YIT Corporation’s Russian enterprise for a most consideration of RUB 4,597 million.
Etalon Group along with YIT Corporation have agreed on the sale of YIT Russia. The completion of the Transaction is topic to additional regulatory approvals.
Etalon Group engaged KPMG to hold out legal, monetary and tax due diligence and to behave as a consultant.
Acquired asset
According to the agreement, Etalon Group will buy YIT Russia, which focuses on mid-market residential actual estate; its portfolio includes 19 projects in 5 different Russian regions: the Moscow metropolitan area, St Petersburg, the Ekaterinburg region, Kazan and Tyumen. YIT Russia’s portfolio consists of residential actual property on the design stage or under construction. YIT’s portfolio in Russia has a complete unsold net sellable space (NSA) of 0.6 mln sqm.
In addition, the Transaction will include unique rights to Dispatcher 24 software program for managing apartment buildings and residential areas, project design documentation and a library of standard design options for cast-in-place construction and buildings made of prefabricated panels, in addition to service companies with 2.5 mln sqm under administration and a 50% stake in a three way partnership with Brusnika, whose assets under administration total 2.2 mln sqm.
Dispatcher 24 is Russia’s largest private IT platform for B2C housing and utility services; it’s utilized by over 180 service companies in 28 Russian cities, with a complete of c. 37 mln sqm of residential space under management. Since 2018, Dispatcher 24’s subscriber base has elevated by an common annual rate of 19%.
In addition, YIT Russia has developed its personal design administration function based on product standardisation, automation, innovation and a hands-on approach to design administration at each level. Thanks to its design business, YIT Russia was the primary to introduce a variety of superior design options within the Russian market, such as transformable apartments, storage areas and walk-in closets.
As of 31 March 2022, based on administration accounts, YIT Russia had a net firm money place of RUB 5.3 billion and net project money of RUB 8.4 billion.
YIT Russia’s history
YIT Russia started its operations in 1961 with the event of various industrial projects. In 1997, YIT Russia started to focus on residential housing development with the acquisition of a St Petersburg-based construction company. From 2005 to 2016, YIT Russia expanded its operations in 5 Russian regions. In 2016, YIT Russia spun its service companies off right into a stand-alone enterprise and later invested within the start-up Dispatcher 24.
Currently, YIT Russia is one of many main housing construction companies in Russia, with a reputation for offering high-quality construction and services. YIT Russia has delivered fifty six residential complexes since the inception of its enterprise in Russia.
Commenting on the transaction, Etalon Group CEO Gennadiy Shcherbina said: “YIT is a long-established name within the Russian market, with a strong reputation for delivering high-quality residential actual estate. Its geographical focus and experience within the mid-market segment represent a strong strategic match with Etalon Group’s plans to bolster its land financial institution in in St Petersburg, Moscow and different areas in 2022.
“The integration of YIT’s enterprise in Russia will allow Etalon Group to obtain a quantity of important goals, such as increasing the scale of the Company’s operations and strengthening our market position. Thanks to YIT’s solid track record in regional markets, good reputation and skilled groups accountable for construction and sales, we can speed up our regional expansion by accelerating the tempo of construction actions on our personal projects in Ekaterinburg and Tyumen in addition to by including attractive new projects. The acquisition of YIT Russia will additionally allow us to enter Kazan, one of many country’s most promising markets, thus increasing our geography of operations to seven regions. It will additionally increase our provide in our primary markets of Moscow and St Petersburg.
“In addition, we see enormous potential from the acquisition for persevering with the technological transformation of our enterprise and becoming a quantity one participant in phrases of technological know-how. The mixture of YIT Russia’s and Etalon Group’s design-related options and know-how will allow us to hurry up our standardisation efforts and to create the best product within the market. Moreover, with entry to the Dispatcher 24 platform, we can become a quantity one Russian supplier of additional services for residents of housing complexes, and the integration of the Dispatcher 24 platform with our personal digital platform will allow us to obtain seamless suggestions that we can use to enhance our product even more.
“I believe that YIT’s project portfolio, service administration firm and applied sciences are solid additions to Etalon Group’s present operations and that this transaction will allow us to obtain strong operational synergies.”