The largest mobile operator Kyivstar has announced that it has signed an agreement to buy 97% of the online taxi service Uklon, which it plans to expand to new markets with the help of its parent company VEON.
The deal is worth $155.2 million and is expected to close in April 2025.
After the deal is signed, Kyivstar and Uklon will remain separate businesses. The Uklon team will continue to work under the leadership of the current CEO Sergey Grishkov.
For Kyivstar, the investment in Uklon was a logical step in building an integrated digital ecosystem, as well as an important stage in the inorganic growth and scaling of the business on the way to fulfilling VEON’s investment commitments of $1 billion over 2023-2027, the company said in a statement.
“Our strategy involves not just providing communication, but creating a comprehensive digital environment where electronic communications are the basic platform for innovative services. Uklon is one of the leading players in its field… We have a lot in common, so by joining forces we will be able to strengthen each other and create even more innovative services, investing in the Ukrainian economy together,” said Kyivstar CEO Oleksandr Komarov.
The investment is fully in line with VEON and Kyivstar’s strategy of building a digital operator, added Zoya Dronshkevych, Kyivstar’s Director of Business Development and Corporate Strategy.
“After closing the deal, we will invest in expanding the ecosystem of Uklon services and products, including multifunctional applications for passengers and drivers, in developing synergies between our businesses in Ukraine, in further expansion of Uklon to other countries where VEON operates, as well as new markets where there is potential to create value for customers and shareholders,” she said.
The deal opens new development horizons for Uklon: from increasing strategic investments in digital services and creating additional jobs to entering new markets with the support of global digital operator VEON, the parent company of Kyivstar, the statement said.
“We have always had ambitions to move on, both in Ukraine and in new markets. I am confident that with the support of Kyivstar, Uklon will gain additional capabilities and expertise to further improve our service and products to provide even more value to all our users and partners,” Uklon co-founder Dmytro Dubrovsky said, as quoted by the press service.
The deal is an important signal for Ukrainian and international investors who are ready to join the rebuilding of Ukraine despite the ongoing war, Kyivstar emphasized.
Dragon Capital acted as the exclusive financial advisor to Uklon in the deal.
Commenting on the deal price at Concorde Capital’s request, Oleksandr Parashchiy, head of research at the investment company, said it corresponds to about 20 times EBITDA, based on Uklon’s Ukrainian financial statements.
“It’s not much for this sector, but it’s very generous for Ukraine. The main thing we don’t know for an adequate assessment is what growth rates the company is planning for,” the analyst added.
Another market participant, who asked not to be named, cited Kyivstar’s likely desire to complete the deal before its SPO on NASDAQ and the mobile operator’s significant free cash flow due to currency restrictions imposed by the National Bank as factors that influenced the deal and its price.
Earlier, the Antimonopoly Committee of Ukraine (AMCU) granted Kyivstar permission to acquire online taxi service Uklon: Tech Uklon LLC, Uklon Corporation and Uklon Ukraine. Kyivstar also applied to the AMCU with a second application for the purchase of MTPK LLC, which owns the online service of the price aggregator for medicines Tabletki.ua.
“Kyivstar is the largest mobile operator in Ukraine with about 24 million subscribers. The company’s digital services portfolio includes the digital medical platform Helsi with a registered base of 28 million users and the film and television platform Kyivstar TV. “Kyivstar bought a 69.99% stake in Helsi in August 2022 for UAH 555.74 million.
Kyivstar’s revenue in January-September 2024 increased by 4.7% to UAH 26.86 billion, while in dollars it decreased by 4% to $674 million. For 9 months of 2024, the company reduced EBITDA by 2.6% to UAH 15.13 billion.
Uklon, according to the company, operates in 27 Ukrainian cities and the Bukovel tourist complex and unites more than 100 thousand active partner drivers on the platform, who together fulfill more than 10 million orders per month. In 2023, the company began international expansion by launching an online car ordering service in Uzbekistan.
According to YouControl, Uklon Ukraine LLC ended 2024 with revenues of UAH 1 billion 717.8 billion, which is twice as much as in 2023, and its net profit amounted to UAH 232.3 million against a net loss of UAH 45.4 million in 2023.
The owners of the company are Dmytro and Victoria Dubrovsky – 38.46% each, Vitaliy Dyatlenko and Serhiy Smus – 11.54% each.
On Wednesday, VEON’s share price fluctuated between $45.3-47.0, but overall the change was insignificant – only a 0.09% decrease to $45.94 per share.
