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Bulgaria's Sirma Group Holding to cede control of Sirma AI to UK investment firm

Bulgaria's Sirma Group Holding to cede control of Sirma AI to UK investment firm Author: Rachel Johnson.

SOFIA (Bulgaria), May 18 (SeeNews) - Bulgarian software developer Sirma Group Holding [BUL:SGH] said that its board has approved an offer to sell a majority stake in its subsidiary Sirma AI, trading as Ontotex, to London-based investment firm Integral Venture Partners at a valuation of the whole target business of 28.5 million euro ($30 million).

The vendors - Sirma Solutions, Ontotext and Sirma Group Holding, stand to receive combined proceeds of some 19.5 million euro, of which the holding's share would be 6.6 million euro, Sirma Group Holding said in a stock exchange filing on Tuesday.

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The potential direct buyer is Integral Venture Partners unit Luxembourg-registered New Frontier Technology Invest.

Shares in Sirma Group soared 51% on Tuesday, closing at 0.755 levs ($0.40/0.38 euro) on the Bulgarian Stock Exchange (BSE).

Integral Venture Partners has offices in London, Budapest and Belgrade. It advises and manages institutional capital from investors such as the European Investment Fund (EIF), the European Bank for Reconstruction and Development (EBRD) and World Bank affiliate International Finance Corporation (IFC) as well as individual funds owned by global entrepreneurs and family offices.

As an additional condition, the buyer has agreed to participate in a capital increase of Sirma AI to the tune of 10.75 milion euro, resulting in the ownership of a 76.2% of the share capital of the target unit. Sirma Solutions will keep the balance of 23.8% of the equity.

The transaction needs to be approved by the banks providing financing as well as by Sirma Group Holding's shareholders who will vote at a general meeting on June 24.

In a separate filing, the Bulgarian holding said that it has completed a capital increase of Sirma AI through the issuance of some 4.94 million new ordinary shares at 10 levs each and 1.17 million Class A shares at 14.50 levs apiece. As a result, Sirma Solutions owns 2.8 million ordinary shares and 654,414 Class A shares, while Ontotext holds 2.12 million ordinary shares and Sirma Group Holding has 376,855 Class A shares.

Sirma AI bought semantic technology firm Ontotext in 2019 for 21.25 million levs. The resulting company specialises in developing products and services based on artificial intelligence (AI)-based technology and semantic databases for global enterprises in finance, healthcare, the public sector and industrial production. Its client portfolio includes S&P, Financial Times, Johnson Controls, automobile conglomerate Stellantis, BBC and the British parliament.

($ = 0.9504 euro)

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