Arsen Galstyan's company buys Russian business of DataArt

YEREVAN, June 30. /ARKA/. DataArt, an IT company founded in 1997 by a St. Petersburg entrepreneur Yevgeny Goland, sold its Russian business to a St. Petersburg investment and management company N3 group (established on the basis of Netrika, which develops software for the state sector) and the managing partner of Tashir MEDICA investment holding, Arsen Galstyan, the Russian edition of Forbes was told by N3 group.

The Russian business of DataArt will operate as an independent company under the new brand name ITentika. DataArt will not have an option to buy back the company, the N3 press service said.

The N3 group said in a statement that the deal will retain a team "with experience in the development of complex technological systems." DataArt had about 1,500 employees in its Russian development centers, now their number has been reduced to 500.
The parties have not disclosed the amount of the deal. It may be 1.5 to 2 billion rubles, based on the number of developers (500 people), said Yury Aleynikov, managing partner of Antero Group. He considers that the potential revenue of the company with such number of employees is 1 billion rubles a year.

A Forbes source, familiar with the details of the transaction, said that DataArt will liquidate Smartdata legal entity (its revenue in 2021 was about 838 million rubles, according to SPARK-Interfax database), while legal entities "Data Management Art" (revenue in 2021 - 511 million rubles) and "Ridlsoft" (revenue in 2021 - 464 million rubles), which also belonged to DataArt, will be passed on to the new co-owners.

"A partner has been found in Russia who is ready to take over DataArt's obligations to former employees who remain in the country," Goland is quoted in the company's statement as saying. It also says that ITentika will make efforts to retain DataArt's existing customers.

DataArt had mostly international customers and "did not work very actively" in the Russian market, General Director of software developer "Reksoft" Alexander Yegorov said. He said that business in Russia may be a real burden for international companies, so assets that could previously be sold for the price of two or three receipts may not be worth anything at the moment.

In March 2022, DataArt announced that it was ceasing all investment, hiring and business development in Russia because of the "special operation» in Ukraine. The company noted in its statement that it would continue to fulfill all obligations to employees and clients.

In April, The Wall Street Journal (WSJ) reported that DataArt employees were leaving Russia - several hundred developers were expected to leave by the summer. DataArt offered employees in Russia to relocate to Armenia, Serbia and Kazakhstan, and about 500 have left the country in the two months since the start of the "special operation," the WSJ wrote.

In total, DataArt employed about 5,700 people, of whom about 2,000 were based in Ukraine and 1,700 in Russia. Some of the specialists, working in the Russian division, DataArt did relocate to Armenia, Serbia and other countries, confirmed a representative of N3 group.

A Forbes source familiar with the details of the deal said that DataArt employees could either move to another country and work for DataArt, or refuse relocation and move to work for a Russian company. Some employees decided to stay in Russia, but moved to work for large corporations, said the Forbes' source. -0-

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10:48 06/30/2022