North West Telecom (NWT) is to acquire the remaining 48% stake in Novgorod Datacom (it already holds 52% of this company) and a 100% interest in Novgorod Dataecom. The corresponding decision was adopted by North West Telecom’s BoD on January 21, 2005.

Novgorod Datacom and Novgorod Dataecom are ISPs servicing households and legal entities and control about 60% of the Internet market in Velikiy Novgorod. The companies provide services using dialup, broadband, LAN-to-LAN technologies and also offer packet telephony services. The transactions to acquire the stakes in these telecom entities are estimated at $2.3 mln.

According to North West Telecom’s general director Vladimir Akulich, the acquisition of major ISPs in Veliky Novgorod is squarely in line with the company’s strategy designed to strengthen its position in the regions, which includes rolling out new services and boosting earnings in a competitive segment of the telecom market.

The financial consultant of the acquisitions was Web Invest Bank, which conducted a feasibility study and financial analysis of the projected transaction.

In the opinion of Web Invest Bank’s managing director Dmitry Gerkusov, North West Telecom, as the largest wireline operator in the North West Federal District, has chosen the correct strategy of raising the proportion of earnings from unregulated and high-yield services in the regions where it has a presence. For this reason, North West Telecom’s first M&A transaction (acquisition of Veliky Novgorod’s major IPSs) is undoubtedly a judicious and profitable acquisition.

Web Invest Bank (www.web-investbank.ru) is an independent investment bank and the center of a diversified financial group. The company engages in arranging bond placements, corporate financing, M&A activities, asset management and brokerage services. In the period 2001-2004, Web Invest Bank took part in more than 80 transactions to raise funds for Russian corporations and RF constituent entities.