18th Jul 2008 07:00
Rambler Media Ltd. ("Rambler" or "the Company"), operating one of Russia's mostpopular internet brands, announces that it has agreed to sell its contextualadvertising company ZAO Begun ("Begun") and related subsidiaries to Google.Rambler currently holds 50.1% of Begun. The transaction will consist of Ramblerbuying the remaining 49.9% stake in Begun from Bannatyne Limited, affiliatedwith the Finam group of companies, immediately after which Rambler will sell100% of Begun to Google subject to certain approvals and conditions precedentfor a total cash consideration of US$140 million, of which US$69.9 million isattributable to Bannatyne, with customary closing adjustments. Rambler's net gain from the disposal is expected to be approximately US$50million after all direct costs associated with the transaction. Proceedsreceived in respect of the sale of its holdings in Begun will be retained by theCompany for further investments and potential acquisitions in line withRambler's stated strategy. The Company's net cash position after the completionof this sale is expected to reach US$100 million. The Company's directorsconsider, having consulted with its nominated adviser, ING, that the terms ofthe transaction are fair and reasonable insofar as its shareholders areconcerned. Google is the world's most popular search engine. Begun is one of Russia'sleading search and contextual text based advertising services with localexpertise, efficient sales systems and the number of its advertisers exceeds40,000. Begun's partner network includes over 143,000 Russian language sites. Mark Opzoomer, Chief Executive Officer of Rambler Media, commented: "Begun is anexcellent business which can become even stronger under Google's ownership.Google has the advertising technology and financial capacity to build uponBegun's established advertising network in Russia. By working together, we aimto create superior growth for Rambler, better monetisation for our business andstronger value for our shareholders going forward. We look forward to continuingto work closely with Alexey Basov and his team at Begun. This is a positiveevent for Rambler and an important step in our ambition to best serve our users,advertisers and partners and successfully build Russia's leading gateway to theweb." Alexey Basov, General Director of Begun further commented: "The entire industrywill benefit from this transaction as there is a high potential for synergies.It brings together Google's visionary technology and Begun's six years ofsuccessful experience in building advertising and dealer networks and directsales in Russia." "Google is committed to giving Russian users, advertisers and partners the bestpossible service and experience," said Mohammad Gawdat, Managing DirectorEmerging Markets, Google. "This agreement means more Russian users, advertisersand partners will get better search results and more relevant advertising." GUIDANCE UPDATE Upon completion, which is expected in September, Begun will no longer be aconsolidated subsidiary of Rambler. Gross assets of Begun on Rambler's bookswere US$43.9 million as of the latest balance sheet dated 31 December 2007.Begun had previously been consolidated within Rambler's accounts from 1 August2007. During the first four months of 2008, based on the preliminary unauditedmanagement accounts, Begun generated profits before taxation and minorityinterest of approximately US$3.4 million. After allowing for the impact of not consolidating Begun in Q4 2008, Ramblercontinues to confirm its earlier revenue guidance between US$100 million toUS$110 million for the full year 2008. Rambler also confirms its guidance ofimproving its EBITDA margin to between 20-25% for the full year 2008 and expectsthis transaction to support further margin improvement in future years. The advertising market in Russia is growing very strongly, and internetadvertising is growing twice as fast. Search related text-based advertising onRussian-language internet sites soared to US$225 million in 2007 from US$110million in 2006. Rambler estimates that internet advertising in Russia willcontinue to grow at around 50% per annum to reach over US$1 billion in 2010,with an approximately equal split between text-based and display advertising. Rambler's vision is to become Russia's favourite homepage and an open,multi-branded gateway to the internet for millions of Russians every day. Thegroup's mission is to build the largest internet audience in Russia by providingthe best suite of search, communications, media and entertainment content in oneplace. *** For further information, please visit www.ramblermedia.com or contact: \* TRambler Media Shared Value LimitedMark Opzoomer / Arthur Akopyan Nicolas DuperrierTel. +7 495 500 3826 Tel. +44 (0) 20 7321 5010 [email protected] ING Wholesale BankingDaniel Friedman / Francis MooreTel. +44 (0) 20 7767 1000\* T *** ABOUT RAMBLER MEDIA Rambler Media is an internet media and services group which operates or hasinterests in leading Russian language internet brands including the originalRussian internet homepage and search engine 'Rambler.ru', on-line newspaper'Lenta.ru', product comparison website 'Price.ru', internet catalogue andnavigation system 'Top 100', instant messaging service 'Rambler-ICQ', digitaladvertising agency 'Index20' and contextual advertising company 'Begun'. RamblerMedia's shares are traded on AIM, the junior market of the London Stock Exchangeunder the symbol 'RMG'. For more information on Rambler Media, visit ourcorporate website at www.ramblermedia.com. This release contains certain forward-looking statements with respect to thefinancial condition, results of operations and business of the Company. Theseforward-looking statements represent the Company's expectations or beliefsconcerning future events and involve known and unknown risks and uncertaintiesthat could cause actual results, performance or events to differ materially fromthose expressed or implied in such statements. Nothing in this disclaimer isintended to nor does it affect the Company's obligations and responsibilitiespursuant to the AIM Rules for Companies. Copyright Business Wire 2008Related Shares:
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