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. Last Updated: 07/27/2016

Armada Plans IPO to Finance IT Buys

Armada plans to sell new shares this month to finance acquisitions and strengthen its position in IT services, company CEO Alexei Kuzovkin said Friday.

Armada plans to issue 20 percent additional shares and place them on the Russian stock exchanges, Kuzovkin said.

The company did not provide further details of the proposed sale.

"We will use the proceeds to buy IT services companies in Russia," Kuzovkin said. "The Russian market is very fragmented, it is a good opportunity to participate in its consolidation and become a leading provider of IT services in Russia."

Armada, which in April was spun off from RBC Information Systems, the owner of the country's only dedicated business television channel, plans to gain 5 percent market share within three to five years.

The country's IT market, with more than 5,000 companies, is estimated to be worth $15 billion this year, Kuzovkin said.

Armada, controlled by RBC shareholders, is running promotional events for investors until July 17 in European cities including London, Zurich and Frankfurt. Aton Capital Group is handling the placement.

Armada reported a net income of $7.7 million last year on sales of $81 million. Kuzovkin said Armada expects its profit to increase to from $9 million to $11 million this year on sales of from $98 million to $107 million.

Armada shares rose 10.7 percent to $14.95 on the RTS index Friday, valuing the company at $149.5 million.

Kuzovkin said that Armada could start a program of American Depositary Receipts next year.