Russia and CIS-focused private equity business Elbrus Capital closed two important transactions at the end of May 2017, with both expected to be value accretive, improve investment returns and exit prospects for the firm’s investors.
The firm advised on the successfully completed merger of SPSR Express and DPD Russia, the two leading courier companies in Russia. The combined company will become the largest express logistics operator in Russia with a nationwide infrastructure, unparalleled competencies in all areas of logistics, a unique team of experts and enhanced customer offering. GeoPost, a subsidiary of La Poste, a postal service company in France, will become the majority owner of the post-merger business, Elbrus Capital’s investors will have a significant minority stake with the balance owned by the management team.
Elbrus Capital also advised on the successfully completed non-cash acquisition by OSG Records Management, the leading player in the document storage and information management market in Russia and the CIS, of the Russia and Ukraine operations of Iron Mountain Incorporated. The transaction will further strengthen OSG Records Management’s positions as the leader in the CIS storage and records management market. The enlarged company will offer its customers the most extensive document storage network in Russia and the CIS region and technologically advanced IT solutions. After the transaction, Elbrus Capital’s investors together with the management team will continue to be the majority stakeholder of OSG, while Iron Mountain Incorporated will hold a minority stake.
Dmitry Krukov, Managing Partner of Elbrus Capital, says: “We are strong believers that investors should select companies with outstanding products and leading market positions. With these two mergers, we reinforce this investment thesis and believe that both SPSR Express and OSG Records Management will further establish themselves as the leading players in their respective markets. We are certain that such market leadership will provide ample business growth opportunities, cost advantage and, ultimately, better customer service. We believe that both mergers are value accretive for Elbrus Capital’s investors and will improve investment returns and exit prospects.”
“These transactions represent another significant milestone for Elbrus Capital for a number of reasons,” said Alexander Savin, Managing Partner of Elbrus Capital. “We see growing interest in the Russian market from international strategic players and financial investors. A strong strategic commitment to Russia from the two international businesses was a critical factor behind the successful completion of both transactions. These transactions are another testament that high-quality local assets continue to remain attractive targets for international investors.” Mr. Savin added: “The two transactions demonstrate that Elbrus Capital has established itself as a reputable local advisor to investors, making them the partner of choice for leading European and global strategic players in Russia. We have successfully built on our investors’ previous experience of working with multinationals, including their partnership with The Walt Disney Company, and are delighted with the result of our advice on cooperation with the GeoPost and Iron Mountain teams. We strongly believe that these international teams will help their new local partners by sharing best-in-class global practices with their newly-formed joint-ventures.”
