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Polish IT consortium Euvic Group has announced the purchase of software developer 7Devs
Mergewave Capital
22.02.2024
3 Min Read
The 7Devs company has joined the Polish IT consortium Euvic Group. Facilitating the takeover was MergeWave Capital, the exclusive investment representative of Euvic Group in Ukraine.
Key Facts
Thanks to joining the Euvic Group, 7Devs received an active investor who is interested in the development of the company. For Euvic Group, this is a strategic partnership and a great asset that will grow.
As Oleksiy Kavinsky, co-founder of 7Devs notes:
The first discussions arose because of the offer of Mergewave Capital, and we were somewhat sceptical, but the negotiations made a very good impression on us. When we finally met in person and got to know the company’s representatives, we felt a resonance, and from that moment our negotiations moved into the practical plane.
As Pavlo Karapinka, co-founder of Mergewave Capital emphasized:
Today, we see that headcount growth of 5-10% or “zero output” is a very good scenario for our IT companies. That is why a merger and a strategic partnership for the sale of a majority share is an extremely profitable option for Ukrainian IT companies at this stage. However, such agreements do not get acquainted quickly. The founders of the companies need to pay attention to it and set aside 6 to 10 months for negotiations.
Taras Bachynskyi, co-founder of MergeWave Capital and exclusive M&A advisor to Euvic and 50 other IT companies in Europe stated:
One of the non-obvious advantages is that the company’s capitalization can grow from such a takeover. This deal will have a positive impact not only on the companies directly, but also on the market as a whole. This will increase competition in the industry and also show Ukrainian IT companies that wartime growth is possible through M&A deals. Of course, we cannot disclose the value of the deal, but I must note that Euvic is not the kind of company that tries to save on such deals. The company targets the highest EBITDA multiples that have been typical of the sector since before the war, they are mostly not traded on price and look at outsourcing companies of around 70-150 professionals with an estimated 5-6 EBITDA.
Considering the state of the market and the lack of interest of external investors, reducing the number of M&A deals by almost 10 times is a strategic position. The task is not to save money but to build a joint partnership for years. As practice shows, more than 40 IT companies that joined the Euvic Group received +10% annual growth from a strategic partner.
Context
7Devs has been operating on the market since 2016 and specialises in the development of Web and Mobile solutions. The main clients are companies from the USA, Canada, and Europe. The headquarters of the company is located in Kharkiv. The staff includes up to 50 employees.
Euvic Group has been working in the Polish IT market for 18 years, the company has a global workforce of about 6,000 employees. In total, Euvic Group has already made 4 investment deals in the Ukrainian market with the assistance of Mergewave Capital. Earlier, they announced a deal with Exoft, and recently signed agreements with Artkai and 7devs.
The company’s representatives also mention a fourth investment, but information about this deal will be kept confidential.
Also, representatives of the companies took part in the action organised by the NGO “Dobrodiy”, a tree named after Euvic Ukraine was planted in the centre of Lviv thanks to the donation of the Armed Forces of Ukraine. The funds went to the “Birds of Victory” project, and the tree will be the symbol of the development of Euvic in Ukraine.
MergeWave Capital is an exclusive M&A investment advisor to more than 50 IT companies in Europe and Ukraine. Mainly accompanies investment attraction or full exit (sale of 100% of shares) of outsourcing and product IT companies.
Euvic Group
7Devs
M&A deals
Market impact
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