UPDATE 2: Rostelecom to buy info safety firm Solar Security for 1.5 bln rbl

(Adds paragraphs 5–7, subheading)

MOSCOW, May 22 (PRIME) – Russian state-controlled telecom operator Rostelecom will buy 100% of Solar Security, a developer of solutions for information security, for 1.5 billion rubles, Rostelecom President Mikhail Oseyevsky told reporters on Tuesday.

“The deal will allow us to strongly advance on this market, and Rostelecom is becoming a market leader,” Oseyevsky said.

Rostelecom First Vice President Vladimir Kiriyenko said the companies’ total share will be 70–80% after the deal. “This acquisition is an important step in the development of a national leader in the cybersecurity field,” he said.

Solar Security will become a subsidiary of Rostelecom and its head Igor Lyapunov will stay in the team and will become a vice president of Rostelecom.

Kiriyenko said the deal had already been approved by the Federal Antimonopoly Service and no warrants were issued since the security operation market is still taking shape.

Oseyevsky said the firm will work under the conventional name RTK Cybersecurity and could be renamed later. Rostelecom will create a single center of cybersecurity competences on the basis of Solar Security and will transfer its own information security services and relevant staff to the firm.

The new subsidiary’s activities will encompass services, own products and comprehensive solutions for cybersecurity.

Analyst’s view

Georgy Vashchenko, director of operations on the Russian stock market at investment company Freedom Finance, said the purchase looks very expensive at first glance, and 1.5 billion rubles equals some 68 annual profits of Solar Security.

“Perhaps, serious improvements have taken place since 2016, for which the latest data were disclosed. Besides, Solar Security’s direction is a key one for Rostelecom. Revenue in the segment of information security is on the rise, while it declines in the telephony segment,” Vashchenko said in a research note.

“Rostelecom’s incomes from cloud services and information security increased 86% on the year to 7.2 billion rubles in the first quarter. Efficiency of the acquisition could be estimated in a year by dynamics of revenue in the segment of cloud and other services.”

(62.5327 rubles – U.S. $1)

End