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CMS Advises Horizon Capital and Datagroup on Leveraged Acquisition of Volia

CMS Cameron McKenna Nabarro Olswang in Kyiv has advised Horizon Capital and Datagroup, Ukraine’s leading fibre infrastructure and digital services provider, on its acquisition of the Volia group of companies, Ukraine’s leading cable and broadband service provider. The transaction was backed by Datagroup’s majority shareholder, a fund managed by Horizon Capital, one of the leading private equity firms in emerging Europe.

The deal was signed in November 2020, and the CMS team advised on all English and Ukrainian law aspects of the deal, including on its structuring, the negotiation of the transaction documentation, and on securing and negotiating a local currency loan equivalent to US$65 million from the European Bank for Reconstruction and Development (the largest loan ever granted by EBRD for Ukraine’s telecommunications, media and technology sector). CMS also assisted Datagroup with securing and negotiating warranty and indemnity (W&I) insurance coverage for the transaction, one of the first deals in Ukraine to incorporate this type of protection.

Graham Conlon, CMS partner and Head of Private Equity for CEE/CIS, and the Managing Partner of CMS Cameron McKenna Nabarro Olswang Ukraine, comments: “We are pleased to have assisted Horizon Capital and Datagroup on this landmark acquisition. The acquisition financing and W&I elements made this a highly unique transaction for Ukraine, highlighting the calibre of our team and ability to advise on the most complex transactions in the market.”

Mykhailo Shelemba, Datagroup’s Chief Executive Officer says: “This is a historic moment for both companies as well as for the Ukrainian telecom sector. “The merger between Datagroup and Volia has created a national fixed line leader across key customer segments – B2C, B2B, and wholesale. The combined network will cover over 4 million Ukrainian households in the country’s top 50 cities. With over 30,000 kilometers of fiber infrastructure, it will be one of the largest networks in the country. Thanks to the integration of subscriber bases, optimization of costs and business processes, as well as large-scale modernization of the network, we expect the growth of the combined company to double over the next five years. In addition to solidifying our leading positions in all customer segments, the new organization will focus on offering new complimentary services to its clients: cloud and cybersecurity for B2B customers, and IoT and OTT solutions for retail customers. Recently, Datagroup launched a full-scale modernization project of its network, in partnership with Cisco, that will increase its throughput capacity by more than 10 times, with the potential to scale up to 20 times. In one year, our network will be one of the most modern, flexible, and scalable networks in the country. These initiatives, coupled with significant operational synergies and financial backing from EBRD and Horizon Capital, truly position us as a national leader, paving the way for further consolidation of a very fragmented fixed telecom market with over 6,000 registered internet service providers. “We will also continue to advance and provide world-class entertainment and content on streaming platforms to all of our retail customers. OTT platform Volia means over 180 channels, including its own package of five Cine+ movie channels, showing the highest-rated movies. We are proud of our partnerships and the content deals we have in place with the biggest international and Ukrainian studios, including Disney, Universal, Film.ua, and Paramount. We will continue to expand our video library which currently holds over 13 thousand titles - movies, series and shows on our streaming platform – that are available on-line on the most popular devices for content usage: Smart TVs, mobile phones, computers and media boxes”.

Lenna Koszarny, Founding Partner and CEO of Horizon Capital, commented: “At Horizon Capital, we are proud of our focus on value-creation at Datagroup over many years culminating in this game-changing acquisition that truly results in the emergence of a Ukrainian fixed telecom market champion. This acquisition, and the significant capital investments made by Datagroup, come at a time when digitalization is a top priority for Ukraine. With the merger of Datagroup and Volia, the combined Group will play an even greater role in bringing new digital services to over 40 million Ukrainians. We truly believe that Ukraine offers attractive long-term investment opportunities and hope that the Datagroup-Volia merger will pave the way for further investments into the country’s infrastructure”.

The CMS team was led by Graham Conlon, supported by Louise Çakar on the corporate side, while counsel Kateryna Chechulina led on the acquisition financing side with support from Khrystyna Korpan. Other team members included Tetyana Dovgan, Olga Belyakova, Vitalii Mainarovych, Mariana Saienko, Ihor Pavliukov, Denys Hatseniuk, Iryna Kravchenko, Orest Matviichuk, Mykola Heletiy, David Cranfield and Nataliya Nakonechna.

For further information, please contact:

Darina Gordienko, Senior Business Development Executive

E: darina.gordienko@cms-cmno.com

T: +38 044 391 3377

Notes to editors:

Founded in 1999, CMS is an integrated, multi-jurisdictional organisation of law firms that offers full-service legal and tax advice. With more than 70 offices in over 40 countries across the world and more than 4,800 lawyers, CMS has long-standing expertise both in advising in its local jurisdictions and across borders. From major multinationals and mid-caps to enterprising start-ups, CMS provides the technical rigour, strategic excellence and long-term partnership to keep each client ahead in its chosen markets.

The CMS member firms provide a wide range of expertise across 19 practice areas and sectors, including Corporate/M&A, Energy & Climate Change, Funds, Life Sciences & Healthcare, TMC, Tax, Banking & Finance, Commercial, Competition & EU, Dispute Resolution, Employment & Pensions, Intellectual Property and Real Estate & Construction.

For more information, please visit cms.law

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