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BUCHAREST (Romania), October 15 (SeeNews) - Romanian IT group Bittnet Systems [BSE:BNET] said on Monday it has signed an investment deal in the form of a business transfer agreement with local peer Crescendo International for 10.9 million lei ($2.7 million/2.3 million euro).
The acquisition and subsequent merger will be made through dendrio, a company with the Bittnet Group, Bittnet said in a press release.
The transfer of the IT&C integration business of Crescendo International to dendrio would include the employees involved in the IT&C integration activity, as well as the equipment necessary for carrying out this activity, starting with a later date following the fulfillment of several suspensive conditions, the company said.
The transaction is expected to be completed by the end of 2018. It is dependent on obtaining the approvals of the competition authority and the extraordinary general meeting of shareholders of the two companies, as well as on obtaining the funding in the form of a corporate bond issuance or a bank loan.
After the closing of the transaction, the IT&C integration activity of Crescendo will be integrated into the operations of dendrio, aiming to create a powerful IT&C integrator with regional coverage.
The resulting company targets revenues of over 100 million lei by the end of 2019
Crescendo International has a history of 25 years in Romania. It made a net profit of 4.4 million lei on a turnover of 79 million lei in 2017.
Bittnet's first-half net profit doubled on the year to 411,000 lei due to improved performance in IT integration and cloud, and in IT training. Its consolidated revenues reached 23 million lei in first half of 2018, an increase of 2% year-on-year. EBITDA also doubled year-on-year, reaching 1.4 million lei.
In August, Bittnet signed a contract to buy a 25% stake in game-based learning local firm Equatorial Gaming, using the proceeds of a private placement of corporate bonds. The placement was successfully closed at the beginning of July, raising 4.7 million lei.
A month earlier Bittnet signed an agreement for the acqusition of a controlling stake in IT company Elian Solutions. In the third quarter of 2017, Bittnet acquired GECAD NET, an IT services integrator, which is now present on the Romanian market under the dendrio brand.
Bittnet was founded in 2007 by Mihai and Cristian Logofatu. The company focuses on IT training and delivering end-to-end IT infrastructure services and solutions from companies like Cisco, Microsoft, Dell, VMware and HP, among others.
It was the first Romanian IT company to be listed on the Bucharest Stock Exchange (BVB), in April 2015.
Shares of Bittnet traded 1.40% higher at 1.09 lei as at 1059 CET on Monday on the BVB.
(1 euro=4.6590 lei)