OREANDA-NEWS. May 30, 2011. ARMADA(MICEX, RTS: ARMD) hereby announces the purchase of a controlling stake in Post Modern Technology (PMT), a developer of software for the healthcare sector. The medical information system MEDIALOG, developed by the company, is the leading system in Russia1; over 30 partners are launching the system in Russian regions and in Europe.

“In April 2011, ARMADA has issued additional shares to use the proceeds to finance selective acquisitions of a number of companies which are attractively priced and whose businesses are complementary to our own. Post Modern Technology, a well-known company on the Russian IT market, has every chance to gain a large share on Russia’s market for the provision of software solutions to healthcare establishments. ARMADA receives the opportunity to offer its clients the best product in its category and to participate in large-scale projects to roll out healthcare information systems,” Alexey Kuzovkin, chairman of ARMADA board of directors, commented on the transaction.

Healthcare spending accounts for 3.9% of Russia’s GDP2. By comparison, the U.S. allocated about 16% of its GDP to healthcare, while leading countries of the European Union allot around 10%.3 “We will be able to raise this metric to 5% in the near future,” Russian Prime Minister said recently, adding that this target is not sufficient. The government plans to earmark RUB 460bn (about USD 15bn) to upgrade healthcare in 2011-20124.

“About 20% of the country’s healthcare establishments have been computerized as of now,  according to the estimate of Ministry of Healthcare and Social Development of Russia. According to plans of the Ministry, all government-financed healthcare establishments should be computerized in the next five years. A strategic alliance with ARMADA who is specializing in software development, shall give us a possibility to receive the necessary resources and produce the synergy required to complete this task in Russia as well as develop business in Europe”, CEO and co-founder of PMT Andrei Borissov said.

PMT’s revenue may exceed RUB 280m (about USD 10m) in 2011 and is expected to grow 30%-50% annually over the next few years. ARMADA purchased 51% of PMT at the first stage of the deal. Shareholders, who are also senior executives of the company, have an option to sell the remaining shares to ARMADA in installments in 2013-2017. The shares will be appraised in the range of 6 to 10 P/E and to be paid for in cash or ARMADA shares.