OREANDA-NEWS.  On 29 January 2008 the East Capital private equity fund from Sweden signed a deal to buy 9.98% of Pivdennyi  (Ukraine) for USD 79.7mn (EUR 54mn).

Currently, Pivdennyi Bank is Ukraine's 19th largest by assets and by equity in the industry. The bank had good growth in 2007 (about 90% vs. 76% in the industry) and had a quite healthy profitability level (ROE of about 17% vs. 12% in the industry). The bank has announced plans for an IPO on an international stock exchange in the near future. Given the bank's total shareholder equity of USD 148.6mn as of 1 December 2007, the agreed price of the deal implies a P/B of 5.38, which is quite high relative to recent M&As and PFTS-traded peers. We expect that the current total shareholders equity of the bank (on 28 January 2008) is about USD 160mn, which would imply a P/B of about 5.0, which is still relatively high relative to the peer banks as well as to how Pivdennyi is valued on the PFTS (P/B of about 4.2 based on equity of 1 December 2007).