The largest mobile operator Kyivstar announced the signing of an agreement to purchase 97% of the online taxi service Uklon, which it plans to launch in new markets with the help of its parent company VEON.

As the Kyivstar press service reported on Wednesday, the closing of the deal is scheduled for April 2025, its sum is $155.2 million. After its signing, Kyivstar and Uklon will remain separate businesses. The Uklon team will continue to work under the leadership of the current CEO Serhiy Hryshkov.

For Kyivstar, the investment in Uklon was a logical step in building an integrated digital ecosystem, as well as an important stage of inorganic growth and business scaling on the way to fulfilling VEON's investment commitments of $1 billion during 2023-2027, the company said.

"Our strategy involves not just providing connectivity, but creating a comprehensive digital environment where electronic communications are the basic platform for implementing innovative services. Uklon is one of the leading players in its field, an absolute "lovemark" for Ukrainians and a technological visionary in the online car ordering market in Ukraine. This is an incredible company with the right corporate culture and values. We have a lot in common, so by joining forces, we will be able to strengthen each other and create even more innovative services, investing together in the Ukrainian economy," said Kyivstar CEO Oleksandr Komarov.

The investment is fully consistent with VEON and Kyivstar's strategy to build a digital operator, added Zoya Dronshkevych, Director of Business Development and Corporate Strategy at Kyivstar.

"After closing the deal, we will invest in expanding the ecosystem of Uklon services and products, including multifunctional applications for passengers and drivers, in developing synergies between our businesses in Ukraine, in further expanding Uklon to other countries of VEON's presence, as well as new markets where there is potential to create value for customers and shareholders," she said.

For Uklon, the deal opens up new development horizons from increasing strategic investments in digital services and creating additional jobs, to entering new markets with the support of the global digital operator VEON, the parent company of Kyivstar, the statement said.

"We have always had ambitions to move forward, both in Ukraine and in new markets. I am confident that with Kyivstar's support, Uklon will receive additional opportunities and expertise to further improve our service and products in order to provide even more value to all our users and partners," said Uklon co-founder Dmytro Dubrovsky.

The deal is an important signal for Ukrainian and international investors who are ready to join the reconstruction of Ukraine even despite the ongoing war, Kyivstar emphasized.

Dragon Capital acted as Uklon's exclusive financial advisor within the framework of the deal.

Oleksandr Paraschiy, Head of the Analytical Department at investment firm Concorde Capital, commented on the deal price upon request, noting that it corresponds to approximately 20 times EBITDA based on Uklon's Ukrainian financial statements.

"For this sector, it's a relatively low multiple, but for Ukraine, it's quite generous. The key unknown for an accurate valuation is the growth projections factored into the company's business model," the analyst added.

Another market participant, who requested anonymity, pointed out several factors influencing the deal and its pricing. These include Kyivstar's possible desire to finalize the acquisition before launching its secondary public offering (SPO) on Nasdaq, as well as the company's substantial available funds due to currency restrictions imposed by the National Bank of Ukraine.

Earlier, the Antimonopoly Committee of Ukraine (AMCU) granted Kyivstar approval to acquire the online taxi service Uklon, including its entities: Tech Uklon LLC, Uklon Corporate, and Uklon Ukraine. Additionally, Kyivstar has submitted a repeat application to AMCU for the acquisition of MTPK LLC, which owns the online pharmaceutical price aggregator Tabletki.ua.

Kyivstar, Ukraine's largest mobile operator, serves approximately 24 million subscribers. Its portfolio of digital services includes the Helsi digital medical platform, which has a registered user base of 28 million, as well as the Kyivstar TV platform for movies and television. In August 2022, Kyivstar acquired a 69.99% stake in Helsi for UAH 555.74 million.

Kyivstar's revenue increased by 4.7% year-over-year in January-September 2024, reaching UAH 26.86 billion. However, in dollar terms, revenue declined by 4% to $674 million. Over the same period, the company's EBITDA fell by 2.6% to UAH 15.13 billion.

Uklon operates in 27 Ukrainian cities and the Bukovel tourist complex. The platform connects more than 100,000 active partner drivers, collectively fulfilling over 10 million ride orders per month. Since 2023, the company has pursued international expansion, launching its ride-hailing service in Uzbekistan.

According to YouControl data, Uklon Ukraine LLC closed 2024 with revenue of UAH 1.7178 billion, doubling its earnings from 2023. Net profit amounted to UAH 232.3 million, a significant improvement from a net loss of UAH 45.4 million in 2023.

The company's ownership structure includes Dmytro Dubrovsky and Viktoria Dubrovska (each holding 38.46%), along with Vitaliy Diatlenko and Serhiy Smus (each holding 11.54%).

On Wednesday, VEON's stock price fluctuated between $45.3 and $47.0 per share, with a minor daily decline of 0.09%, closing at $45.94 per share.