Ulmart, Russia’s largest online retailer, plans to sell $1 billion of shares in an initial public offering next year to fund expansion in the country’s e-commerce market.
The company is likely to be valued at $5 billion to $6 billion, based on preliminary valuations by investment banks, St. Petersburg-based Ulmart said today in a statement.
The announcement provides a ray of light for the Russian IPO market, which stagnated last year after the imposition of US and European Union sanctions over the Ukraine crisis and with the country’s economy facing a recession. Lenta investors raised $952 million in Russia’s last major IPO in February, and the stock has since fallen 35 per cent.
Ulmart is backed by August Meyer and Dmitry Kostygin, who were co-owners of Lenta and sold their stake of more than 40 per cent to investors led by US leveraged buyout fund TPG Capital in 2011. They invested the proceeds into online retail, seeking to build the Russian equivalent of Amazon.com.
In 2013, Ulmart became Russia’s first online retailer to have sales surpass $1 billion. Revenue last year reached $1.3 billion, in spite of the ruble’s devaluation, the company said today. Yandex NV, Russia’s largest Internet company, expects to report 2014 sales of as much as 51.4 billion rubles ($800 million).
Bloomberg News, edited by ESM
