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. Last Updated: 07/27/2016

Technology Firm IBS Delays Service Unit IPO Until 2008

IBS Group Holding, the country's leading provider of information technology services, will delay an initial public offering of its IT-services unit until the middle of next year because it needs to digest an acquisition, CEO Anatoly Karachinsky said.

IBS Group may sell about 25 percent in the IT unit, also called IBS, Karachinsky said in an interview Thursday. The company values the unit at more than $700 million, he said. The proceeds will be used for acquisitions.

"Consolidation will continue as the market in Russia is terribly fragmented," he said. "We will buy, buy and buy."

Karachinsky said last September that he planned to sell shares in the IBS unit in April or May. The IPO was delayed as IBS Group bought Borlas, an IT consultant, in April for an undisclosed sum. There are more than 5,000 Russian IT-services companies, Karachinsky said.

"We physically didn't have the time," Karachinsky said. "It was not even an issue, whether to do an IPO or buy Borlas. It creates a company in a different league, a national champion unattainable for anyone."

The owners of IBS, including Karachinsky, raised $113 million selling about one-third of the company's stock in November 2005. IBS will consider whether to conduct IPOs for Luxoft, its offshore programming company, and DEPO, its hardware products unit, at later dates, Karachinsky said.

The company is expanding by hiring about 350 employees a month, Karachinsky said. The company will increase its work force to between 7,000 and 8,000 this year, he said.

IBS Group sales are expected to rise to $1 billion this financial year, which closes March 31, 2008. In February, the company forecast revenue of $728.5 million in the year that ended in March. IBS Group reports results for the financial year that ended in March in September, Karachinsky said.