Consortium led by Xavier Niel clears regulatory approval to acquire Ukraine's #1 fixed telco Datagroup-Volia; Pursuing merger with #3 mobile operator Lifecell; Significant investment planned in Ukraine

PARIS, April 8, 2024 /PRNewswire/ -- Key highlights:

• NJJ Holding ("NJJ"), the investment firm founded and owned by Xavier Niel, the founder of leading European telco group iliad, obtained regulatory approval in March 2024 to acquire Datagroup-Volia, Ukraine's leading fixed telecom and pay TV provider.
• Datagroup-Volia is 96.13% owned by a fund managed by U.S. private equity firm Horizon Capital, led by Lenna Koszarny, and 3.87% by Datagroup-Volia CEO Mykhaylo Shelemba.
• Once the transaction has closed, the consortium led by NJJ intends to merge Datagroup-Volia with Lifecell, the country's #3 and fastest-growing mobile operator. This would take place after regulatory approvals are obtained, resulting in 100% ownership of these Ukraine-domiciled assets.
• The group plans to launch a significant investment program upon the completion of the transaction in Ukraine, with investments in network, licenses, equipment and expansion of  fixed and mobile infrastructure in the country to accelerate future growth.
• Post-closing, a fund managed by Horizon Capital and Mykhaylo Shelemba will invest in the combined entity to retain a minority position and be the local partner of NJJ in Ukraine.
• The combined Datagroup-Volia-Lifecell entity will be led by Mykhaylo Shelemba, current Datagroup CEO, as Group CEO. Pierre Danon, Chair of the Supervisory Board, Datagroup-Volia, will serve in the same capacity for the merged entity.
• This historic transaction is the first major investment by a new market entrant since the full-fledged invasion, as well as a significant investment in domestic infrastructure in Ukraine.
• It is a landmark deal aimed at acquiring existing Ukraine-based telecom players and subsequently combining these into a platform for expansion, growth and investment, demonstrating that Ukraine can attract high quality investments regardless of the prevailing situation.
• Transaction closing is subject to remaining regulatory approvals and other customary closing conditions.

NJJ, the investment firm founded and fully-owned by French tech and telecoms entrepreneur Xavier Niel, and Horizon Capital, led by Lenna Koszarny, a U.S. private equity firm investing primarily in fast-growing tech companies in Ukraine and Moldova via dedicated funds, and Mykhaylo Shelemba, Datagroup-Volia CEO and shareholder (together, the "parties"), have announced that regulatory approvals were granted in March 2024 for NJJ to acquire Datagroup?Volia, Ukraine's leading fixed connectivity and pay TV provider. Once remaining conditions are met for the acquisition of mobile assets in Ukraine, trading under the Lifecell brand, the parties intend to create a national telecom champion, with the highest growth profile among peers, and the "operator of choice" for safe, secure and reliable telecom services in Ukraine.

The combined entity will provide mobile connectivity to nearly 10 million Ukrainians, while its fixed network will cover more than 4 million residences across Ukraine. The merger of Datagroup-Volia and Lifecell will also enable consumers to benefit from a triple play offer, bundling mobile, fixed connectivity and pay TV, improving quality of service, pricing and furthering the integration of European standards.

Xavier Niel, Founder of NJJ Holding, said: "I am pleased that we have achieved this major milestone with the regulatory approval for the acquisition of Datagroup-Volia, a significant step towards the creation of a national Ukrainian telecom champion, providing Ukrainians with safe, secure and reliable telecom services. Ukraine is home to an impressive tech sector with innovation in artificial intelligence, a high degree of digitalization and technological affinity. We are confident that our landmark transaction will serve as a signal to others that the time to invest in Ukraine is now, to support the rebuilding of the country and realize its potential. We look forward to working in the country and we are confident that our global telecoms activities, dedicated team and sector expertise, from France to Poland, from Italy to Sweden and the Baltics, will bring value to all stakeholders, including employees and customers, and to Ukraine as we work together to further develop the telecom offering, tech, artificial intelligence and other strategic areas of cooperation."

Lenna Koszarny, Founding Partner and CEO of Horizon Capital, added: "We are delighted to attract Xavier Niel and NJJ to Ukraine, paving the way for a significant investment by a high-quality Western strategic in Ukraine's infrastructure sector during historic times. Horizon Capital's journey began in 2010 with the acquisition of a minority stake in Datagroup, then took a bold leap forward in 2016 after acquiring majority control. People make the difference at Horizon Capital and this deal is no exception. Attracting Mykhaylo Shelemba from McKinsey Dubai, recruited by Dmytro Boroday, Partner and beating out 17 candidates to assume the helm as Datagroup CEO in 2016, was truly game-changing. Under Mykhaylo's leadership, Datagroup increased revenues 3.8 times and EBITDA 4.8 times in USD terms over five years, underpinning our confidence to raise our ownership to over 96%, and together with Mykhaylo Shelemba, fully control Datagroup's destiny. Our vision to pursue a triple play, bringing fixed, pay TV and mobile together, was born in 2018 with the first meetings with Volia and Lifecell, and inspired by Xavier Niel, who is renowned as the French pioneer and visionary who over 20 years ago invented the Freebox ? the world's first triple-play box ? bringing Internet to many households and mobile usage within reach. We completed the acquisition of Volia in June 2021, followed by a historic meeting with Xavier Niel and his team in Paris in December 2021, that has now culminated in this landmark transaction. To lead a deal of this magnitude and importance is the honor of a lifetime, and we are truly grateful to Xavier Niel and the NJJ team for their trust and partnership, and to the Datagroup-Volia and Lifecell leadership and teams for their excellence. We look forward to partnering with Xavier Niel and NJJ in the future, and are confident that this transaction will serve as a critical market signal, attracting new investments into Ukraine's infrastructure and technology sectors and contributing to the country's ongoing resilience, digitalization and growth."

Mykhaylo Shelemba, CEO of Datagroup-Volia, added: "The merger of Datagroup-Volia and Lifecell will create a new champion in Ukraine's telecom industry, combining two stellar assets with vast synergy potential. Expansion of the triple-play offering is expected to result in clear, tangible benefits for consumers in cost, convenience, and quality of service. Mutual integration of customer bases, improvements in cost-efficiency and business processes, as well as strengthening of network investment will allow us to offer even more attractive and competitive packages to our subscribers than both companies were able to provide on a standalone basis. This opportunity is only made possible through the bravery of Ukraine's courageous defenders, protecting the country at this pivotal time, and the over 5,000 talented and dedicated management team and employees of Datagroup-Volia and Lifecell, who have demonstrated the utmost resilience and commitment to continuing to deliver high-quality services to Ukrainians every day, despite challenging circumstances. I thank Horizon Capital for their vision, trust and backing for the past eight years and look forward to embarking on this new, exciting chapter led by Xavier Niel and NJJ, undoubtedly one of the most visionary, experienced and trailblazing telecom investors globally. We are confident that this deal will start a new page in Ukraine's telecom market and inspire others considering investing in Ukraine."

About NJJ Holding

NJJ Holding is the personal investment vehicle of Xavier Niel, a recognised entrepreneur and major long-term investor in the telecoms sector across the world.

He is also the owner of Iliad founded in 2002, which revolutionized the telecom market in France, ensuring that French consumers enjoy some of the lowest broadband rates in the developed world with its "Freebox". In 2012, he launched Free Mobile offering no-strings-attached SIM card services. Iliad now being a leading telecoms provider present in France, Italy and Poland.

Overall, Xavier Niel has telecoms investments in more than 20 countries across the world, delivering mobile services to over a hundred million subscribers.

About Horizon Capital

Horizon Capital is the leading private equity firm in Emerging Europe with $1.6 billion in assets under management, from investors with a capital base of over $700 billion, raising over $800 million in growth capital in six years, including its latest fund, $350 million Horizon Capital Growth Fund IV, L.P. The firm's investment strategy focuses on backing visionary entrepreneurs leading fast-growing, primarily tech and export-oriented businesses in Ukraine and Moldova. Horizon Capital-managed funds have invested in over 172 companies employing more than 80,000 people. Horizon Capital's investment in Datagroup-Volia is held by Horizon Capital Growth Fund II, L.P.

About Datagroup ? Volia

Datagroup and Volia is the national fixed line leader across key customer segments ? B2C, B2B, and wholesale. The Company's network covers over 4 million Ukrainian households in more than 100 cities,  with over 35,000 kilometers of fiber infrastructure making it one of the largest networks in the country. The Company also offers a broad portfolio of value-add services to its clients, including cloud and cybersecurity for B2B customers, and IoT and OTT solutions for retail customers. With more than 2,000 institutional clients, the group is also a key partner of the public sector, collaborating with state bodies and agencies in the fields of finance, defense, and communications.

Contact:
Alona Kotsiubynska
[email protected]
+380 93 297 9487

Logo - https://mma.prnewswire.com/media/2380907/4635085/NJJ_Holding_Logo.jpg
Logo - https://mma.prnewswire.com/media/2342850/4550403/Horizon_Capital_logo.jpg
Logo - https://mma.prnewswire.com/media/2380906/4635083/Datagroup_Logo.jpg
Logo - https://mma.prnewswire.com/media/2380905/Volia_Logo.jpg