Consolidation in Ukraine as Datagroup makes Volia acquisition
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Joseph O'Halloran
| 24 December 2020
In a move that will see the country’s leading national fibre infrastructure and digital services provider take on board the nation’s leading cable broadband service provider, Ukraine's Datagroup has reached an agreement to purchase 100% of Volia.
Volia 24Dec2020
Each company focuses on different customer segments within the East European country. Datagroup claims leadership in Ukraine’s B2B segment with only 15% of its revenues generated by B2C, while Volia is the leader in the B2C segment with less than 5% of its revenues generated by B2B customers.

Post-integration, the combined business is expected to generate revenues exceeding $130 million and over $50 million in EBITDA, with what is said the be one of the lowest leverage ratios among large telecom companies in the CEE region.

The deal is subject to customary regulatory approvals but has the full backing of Horizon Capital’s EEGF II fund, the company being the sole financial investor in Datagroup with a 96.13% stake, alongside Datagroup chief executive officer Mykhailo Shelemba, who holds 3.87%.

Uniting the two private-equity backed companies has been a long-held dream within Horizon Capital and Datagroup said Lenna Koszarny, Horizon Capital’s founding partner and chief executive officer. “We are thrilled to realise the opportunities from merging two companies which are such a natural fit for each other,” she noted. “Both Datagroup and Volia operate in a highly fragmented industry which historically has meant limited investor interest and capital invested. Scale truly does matter when it comes to infrastructure to meet the demands of increasing digitalisation, requiring significant capital investments to modernise and expand both last-mile and national fibre infrastructure. The winners from this merger will be Ukraine’s consumers and the country as a whole, as Ukraine needs significant backbone infrastructure investments to meet the demands of the digital age.”

“The fixed broadband market in Ukraine is extremely fragmented with over 5,000 internet service providers operating in the country. This large fragmentation does not allow most players to maintain high investment levels necessary to continuously introduce new technologies for their customers, which is critical in this modern, digital world,” added Shelemba. “The merger…will allow us to realise operational synergies, invest into modernisation of our networks, continue to provide best-in-class service for our customers, and create greater opportunities for our employees.”