Art of investments


Comment of Tim Demchenko, Head of Private Equity and Special Situations at VTB Capital, for Private Equity international

Tags: private equity

Feb 17, 2012
VTB seals partial exit via US float

Oliver Smiddy (Private Equity international)

The buyout arm of Russian investment bank VTB has concluded a partial exit of software developer EPAM by floating the business on the NYSE - the first company of CIS-origin to go public in the US since 2004.
VTB Capital Private Equity realised a portion of its stake in software developer EPAM earlier this week, selling down its position when the business debuted on the New York Stock Exchange.

The sell-down generated an IRR for VTB of about 40 percent, according to a source with knowledge of the deal. VTB still retains a significant shareholding the business.

VTB acquired a minority stake in EPAM in mid-2010 in a deal worth about $280 million. The company, which is of Belorussian origin, has a global client base and services five of the world's ten biggest software companies, providing IT support, software engineering and consulting.

The company has 90 percent of its projected revenues this year already contracted, according to VTB. The firm's head of private equity and special situations, Tim Demchenko, told Private Equity International that it would now wait at least 12 months before considering further sell-downs of its stock. "We want to see its 2012 earnings reflected in the share price, and we'll make a decision then. But the business is extremely strong and we look forward to further value creation."

EPAM's IPO was heavily oversubscribed, according to a source close to the process. The company offered 6 million shares of common stock at a price of $12 per share. By Thursday's close, the stock had risen to $13.54, a rise of 13 percent.

Commenting on the IPO, Demchenko said: "It's a great story for the company and for VTB Capital. The proceeds and access to capital markets will continue to fuel EPAM’s growth and international expansion.”

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