Mail.ru pays $1.47B for full ownership of Russian social network Vkontakte

Vkontakte-screenMail.ru Group who has agreed to pay a total of $1.47 billion for 48% remaining shares Russian social networking giant Vkontakte. Acquiring the shares in an all cash deal from Blesmir Development Limited and Palagon Limited, Mail.ru plans to fully consolidate VK as quickly as possible, according to the press release.

As a part of the deal, all ongoing litigation and shareholder disputes between United Capital Partners and ousted VK-founder Pavel Durov “have also been settled”.

The acquisition of the 48.01% was closed on September 16th 2014, announced Mail.ru, the publicly traded leader in high-growth Russian-speaking internet market. New round makes the total money paid by Mail.ru for VK reach $2.07 billion. Mail.ru said it funded the deal with its existing cash and with 4-year, $585 million loan from Gazprombank.

Vk had revenue growth of 14% to 3.8 billion rubles ($98.7 million) in 2013, increasing its net profit to 53 million rubles ($1.37 million).

Commenting on the acquisition, Dmitry Grishin, co-founder and CEO of Mail.Ru Group, said “We are happy to announce the acquisition of 48,01% of VKontakte stake from UCP. The consolidation of 100% of VK and the termination of all outstanding shareholder disputes will allow focus on the product and its further development. We respect the successful results driven by VK’s team and do not plan any significant changes in the team or the product itself. Moreover, we are ready to give the current team an opportunity to realize their plans and initiatives.”

Victoria Lazareva, partner of UCP, said they are “satisfied with the transaction and confirm full settlement and release of the mutual claims between the parties”. Durov, who has been in the center of a political dispute with then partners at Vkontakte, also said he welcomes the decision to see the claims are abandoned for his new business Telegram.

 

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