August 14 (SeeNews) - Romanian IT company Bittnet Systems [BSE:BNET] said on Tuesday it has signed a contract for purchasing a 25% stake in game-based learning local firm Equatorial Gaming.
Through this transaction, Bittnet will hold a 24.9989% stake in the company controlled by Romanian entrepreneur Dan Berteanu, it said in a press release.
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"Bittnet has started as a company specialized in delivering IT training and through the years, has managed to become a leader in this domain in Romania," Bittnet CEO Mihai Logofatu said, adding that the investment in Equatorial Gaming is part of the group’s 2018-2020 growth strategy in the education area.
The transaction will be carried out in two phases. In the first phase, which is expected to close by September 15, Bittnet will acquire 24.9989% of Equatorial Gaming shares for a total of 1.05 million lei ($257,012/225,370 euro).
In the second phase, Bittnet will grant Equatorial Gaming a convertible loan with a conversion option at discretion of Bittnet’s management in the amount of 1.05 million lei, for a period of three years, with an interest rate of 9% per year. In case of exercising the convertibility option, Bittnet will increase its stake in Equatorial Gaming to 45%.
"Estimated 100 billion euro are spent every year in Europe on training programs. In the past few years we have benefited from the position of the leader on the Romanian IT training market, but we also have recognized that in order to stay ahead and keep building our position, we need to constantly bring new solutions to our clients. Our investment in Equatorial Gaming aims to serve these exact purposes," Bittnet CFO Cristian Logofatu said.
The capital for acquiring 25% stake in Equatorial Gaming has been raised by Bittnet during private placement of corporate bonds. The placement was successfully closed at the beginning of July when the company raised 4.7 million lei in financing.
“We are proud to have developed products with 100% Romanian methodology that are being successfully exported to mature markets in Western Europe. Today’s transaction comes after several years of collaboration between Bittnet and Equatorial Gaming," Equatorial Gaming CEO Dan Berteanu said.
Equatorial’s history dates back to 1997, when the company was delivering transformational training and consulting programs at an individual, team and organizational level in Romania and abroad. In 2015, the company invented and launched Equatorial Marathon, an Alternate Reality Game for corporations, which increases the level of engagement and stimulates behavioral changes in employees. The product is available 24/7, on multiple devices and has been used for learning projects, conferences and academic masters in Romania, Poland, Italy and France.
This acquisition of a stake in Equatorial Gaming comes less than a month after Bittnet signed a similar agreement for taking a controlling stake in IT company Elian Solutions. In the third quarter of 2017, Bittnet acquired GECAD NET, an IT services integrator, which is now present on the Romanian market under dendrio brand.
Bittnet will devote the coming months for finalizing the process as well as overlooking the integration of both Elian Solutions and Equatorial Gaming into the group’s structure.
Bittnet was founded in 2007 by Mihai and Cristian Logofatu. The company focuses on IT training and delivering end-to-end IT infrastructure services and solutions from companies like Cisco, Microsoft, Dell, VMware and HP, among others.
Bittnet was the first Romanian IT company to be listed on the BVB, in April 2015.
Its shares traded 1.42% higher at 1.0750 lei as at 1119 CET on Tuesday on the BVB.
(1 euro=4.6590 lei)