The national operator Datagroup is investing $20 million in a project to modernize the all-Ukrainian backbone network in partnership with the world leader in production of network equipment Cisco (the United States), the company’s press service said.
Datagroup notes that investments in the project will amount to $20 million, and the project itself will help the company bring the quality of services to a higher level.
At the same time, it is specified that the company carried out thorough preparation for a tender and chose the best world equipment manufacturers to participate in it. Based on the results of the tender, Cisco became the project vendor.
“In 2020, the company’s network traffic grew by 35%. We made a decision on a large-scale network modernization, which will allow us to implement our business strategy. It will also lay the foundation for business growth for 10 years: it will allow us to introduce various innovative services and attract new clients in corporate, public and private sectors,” CEO of Datagroup Mykhailo Shelemba said.
The press release says the total length of the Datagroup high-speed data transmission network is more than 22,000 km: these are long-distance DWDM and MPLS networks, and urban MPLS backbone networks in the major cities of the provider’s presence. The modernization will apply to all levels of the network and will significantly increase its throughput.
Datagroup was founded in 2000. It is one of the largest B2B operators in Ukraine, provides services in more than 90 settlements of the country.
The company provides Internet connection, telephony, television and video surveillance services, as well as a cloud service from Microsoft and a range of cybersecurity services – DataProtect.
Data Group in 2019 increased its net profit by 6.97 times compared to 2018, to UAH 141.764 million.
Horizon Capital, a leading private equity firm in Emerging Europe, has increased its stake in Datagroup, Ukraine’s leading fiber infrastructure and digital services provider, from 73.46% to 96.13%, via its $370 million fund, Emerging Europe Growth Fund II, L.P. (EEGF II).
The deal participants said in a joint press release published on Thursday that EEGF II is pleased to be the sole investor in Datagroup, alongside CEO Mykhailo Shelemba, who holds 3.87%.
As a result of this transaction, the company’s founder Oleksandr Kardakov, and other minority investors, have fully exited Datagroup. Financial details of this deal were not disclosed.
“Since assuming operational control of the company in 2016, Datagroup has completed a full business turnaround, reducing net debt to EBITDA by 9 times to a low 0.3 level today, and delivering over 20% compound annual growth in EBITDA. Datagroup continues to invest heavily into CAPEX, embarking on a network modernization program that will enhance further the high quality of services and innovation provided to its valued clients,” Horizon Capital Principal Dmytro Boroday, who leads this transaction at Horizon Capital, Said.
He also said that Datagroup has boosted its leading position in B2B, wholesale, international traffic and satellite communication segments, and is poised to deliver continued solid growth, both organically and through M&A.
“I am proud of the company’s results and the successful transformation that has taken place over the past four years. I am pleased that the company has strengthened its partnership with Horizon Capital, an investor that has backed Datagroup for many years, and wish them success in their strategic ambitions. I am confident that, together with management, they will take Datagroup forward to a new stage of growth and development,” Oleksandr Kardakov, founder and former shareholder of Datagroup, said.