UPDATE 1-Finnish post firm Itella makes $470 mln Russia buy
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HELSINKI, April 28 (Reuters) - Finnish state-owned post and logistics firm Itella said on Monday it had agreed to buy top Russian warehouse firm NLC Group for around 300 million euros ($470 million) to expand into the fast-growing Russian market.
"Russia's intense economic growth is boosting demand for logistics services -- last year demand for warehousing space in Moscow outstripped supply many times over," Vesa Vertanen, Senior Vice President at Itella, said in a statement.
"Through NLC, we will gain a strong competitive advantage as a provider of global logistics solutions," he said.
Itella said it had agreed to pay 180 million euros for 90 percent of shares in NLC to funds managed by Citi Venture Capital and RosEvroGroup. It will also take on net debt of 100 million euros.
RosEvroGroup will continue to keep full control over customs clearance and brokerage business and hold 10 percent until the end of 2010, when Itella will buy it out for 20 million euros.
NLC has staff of 6,000, running warehouses in Moscow and six other large cities in Russia, and reaching 2008 sales of 180 million euros.
At the end of 2008 NLC would have 600,000 square metres of warehousing space, including 230,000 square metres in its own premises.
This year Itella has expended its Moscow warehousing to 40,000 square metres and will open a new warehouse in St. Petersburg next month.
The completion of the acquisition is subject to the approval of the Russian competition authorities. (Reporting by Tarmo Virki; Editing by Will Waterman and Quentin Bryar)
