HeadHunter Group PLC Signs Agreement to Acquire LLC Zarplata.ru

MOSCOW, Nov. 24, 2020 (GLOBE NEWSWIRE) -- HeadHunter Group PLC (Nasdaq: HHR, MOEX: HHRU) (HeadHunter or the “Company”) announces today that it has entered into a sale and purchase agreement to acquire LLC Zarplata.ru (“Zarplata”), an online recruitment platform operating in Russia.

On November 24, 2020, HeadHunter entered into a sale and purchase agreement to acquire 100% of the issued charter capital of LLC Zarplata.ru (“Zarplata”) from Hearst Shkulev Digital Regional Network B.V. for a total purchase price of ₽3.5 billion in cash subject to customary price adjustments at closing as well as limited post-closing escrow arrangements (“Acquisition”). The Federal Antimonopoly Service of Russia (“FAS”) has approved the Acquisition and completion is expected to occur by the end of January 2021, subject to customary closing conditions.

Transaction Rationale

Zarplata is a job classified platform with a strong footprint in certain Russian regions, such as Siberia and the Urals. It was formed by consolidating local city portals, which has created high local brand recognition and means that Zarplata has a significant share of organic traffic. Revenue generated by Zarplata in its key regions is comparable with HeadHunter’s revenue in those geographies. In 2019, Zarplata generated total revenue of ₽854 million according to Zarplata’s unaudited non-IFRS internal data. Based on the Company’s diligence of Zarplata to date, the Company has concluded that Zarplata’s revenue recognition policy is similar to IFRS, however there can be no assurance that this policy was applied consistently in historical periods.

The Company believes the Acquisition will accelerate HeadHunter’s development in key strategic areas such as increasing penetration in the Russian Regions and outreach to blue collars and SMAs.

Integration and Synergies

Zarplata will operate separately from HeadHunter and will remain accessible at its existing web address, www.zarplata.ru. It is currently anticipated that the Zarplata management team will remain in place and will continue to be involved in further operations.

Headhunter believes that the transaction offers significant synergy potential with an expectation that HeadHunter and Zarplata will align their sales, monetization and marketing strategies as well as product development.

Financing Considerations

The Acquisition will be financed with a new debt facility the terms and source of which remain undetermined. HeadHunter has various sources of financing for the Acquisition available to it, including open debt facilities at VTB Bank and the ability to access the Russian domestic debt capital markets by issuing ruble bonds via the ₽20 billion indefinite exchange bond program that Headhunter established on MOEX in October 2020.