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Astrum Online Entertainment

Company


Owners:
Mail.ru Group - 100%

Owners

Astrum Online Entertainment - till 2009 the independent Russian company, the largest player in the market interactive online of entertainments in Eastern Europe. On December 1, 2009 the company was a part of Mail.ru.

At the time of the transaction the holding included five companies:

By the companies of holding it is started more than thirty mass multi-user online of games which such projects as Perfect World, "the Lord of the Rings Online are among: Angmar's shadows", "Legend: Heritage of Dragons", Territory, TimeZero, Sphere, Piratiya and others. At the beginning of 2009 the general audience of projects of holding made more than 20 million players.

Performance Indicators

Revenue – about $50 million in 2008, about $100 million in 2009 (sources in Astrum) [1].

History

2009: Mail.ru buys the company

Preparation of the company for sale

In September, 2009 about the preparing consolidation Mail.ru with Astrum Online Entertainment Vedomosti were told the manager of the company making computer games, and the source close to one of DST companies. Negotiations still go, but the probability of the transaction is high, speak the manager, close to Astrum, and two sources among shareholders of Mail.ru and Astrum. It not merger of one company another, and consolidation by redistribution of shares of the existing co-owners, one of interlocutors of Vedomosti told. The transaction is "partially" monetary, tells a source, close to shareholders of both companies: the southern African Naspers owning 32% of Mail.ru wants that DST compensated washing out of its share in the united company. He does not call the amount of expected payments.

That sales of on-line games grew, it is necessary to attract new users, and it what Mail.ru has, the manager, close to one of the parties, explained sense of consolidation.

Besides, production and distribution of games within one company significantly optimize costs. Shareholders expect growth of capitalization of the united company. The interlocutor of Vedomosti cites as an example the Chinese Internet company and the producer of the games Tencent which overtook the largest Chinese search system Baidu on capitalization. About 40% of revenue of Tencent generate on-line games.

Astrum is a monetization source for many portals (for example, for Rambler) which after consolidation of this holding with Mail.ru can not want to cooperate with the main competitor. Rambler is important only quality of games, the representative assures it.

In September, 2009 the company costs about $0.5 billion, the manager of large investment bank, and Astrum — about $200 million considers. The top manager of the Internet company estimates Astrum at $300-400 million.

FAS permits the transaction on sale to the company

On November 24, 2009 the Federal Antimonopoly Service (FAS) of Russia approved sale of Naspers to the daughter (the MIH Internet BV company registered in the Netherlands) of 100% of stocks in authorized capital of Astrum Online Entertainment company. Also the petition for purchase of 38% of stocks of Astrum by other Dutch subsidiary of Naspers (Myriad International Holdings B.V) was satisfied. Information on it is published on the website of federal service.

The Digital Sky Technologies (DST) investment fund acts as the seller. "DST already for a long time looked for where to attach the game assets, for example, the scenario of the consolidation Astrum Online Entertainment and Mail.ru was considered, - Tatyana Menkova, the analyst of Finam comments. - However Naspers insisted on that the fund compensated possible washing out of a share in the portal. It seems that it was not succeeded to agree, and other decision was made. It can be considered compromise. On the one hand, DST will receive money which it will be able to invest in new projects. On the other hand, the game company will be densely integrated with Mail.ru, having acted as a factor of revenue growth of the portal". According to Menkova, because of closeness of Astrum Online it is difficult to give an exact assessment to its cost, but the speech can go about a corridor of $100-300 million.

Mail.ru receives 100% in the company

On December 1, 2009 the Mail.ru company became the owner of 100% of Astrum Online Entertainment. The stocks Astrum are partially paid with the stocks Mail.ru, partially – money. Other details of the transaction of the party are not disclosed.

The decision is made that the company will work under the Mail.ru brand, Dmitry Grishin will remain its president and the CEO. Igor Matsanyuk, the president of Astrum, will receive a position of the senior vice president of Mail.ru, Vladimir Nikolsky, the CEO of Astrum, will hold a post the vice president of the company.

Earlier market participants explained that the idea of the consolidation Mail.ru and Astrum belongs to DST, and Naspers was against washing out of the share in Mail.ru. The South African holding required that DST compensated this reduction by money. What will be Naspers share in the joint Internet company, representatives of Mail.ru do not open, but say that at DST control will be retained.

According to Dmitry Grishin, online games are one of the most effective methods of monetization of Internet audience today. He hopes that the transaction will bring considerable synergy effect.

Notes