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BGEO Buys Remaining 75% Stake In Georgian Global Utilities For $70 Mln In Cash

BGEO Group PLC (BGEO.L), formerly Bank of Georgia Holdings PLC, announced Wednesday the purchase of the remaining 75% stake in Georgian Global Utilities Ltd. Or GGU.

BGEO's unit JSC BGEO Investments has signed a Share Purchase Agreement to acquire a 75% equity stake in GGU for cash consideration of $70 million. The transaction values GGU's enterprise value at GEL 287.5 million.

The transaction is expected to be both earnings and book value accretive from day one.

GGU is a privately-owned company that supplies water and provides wastewater services to 1.4 million people in Tbilisi, Mtskheta and Rustavi.

In December 2014, BGEO acquired a 25% shareholding in GGU for $26.25 million. The acquisition was earnings as well as book value accretive in year one. In addition, BGEO had a call option to acquire an additional 24.9% shareholding within a 10-month period for a further $26 million.

Following the buy-out of the remaining 75% stake, the Group will consolidate GGU financials and will report GGU as a separate segment.

In addition, BGEO may, in the future, transfer its existing 25%-stake in GGU and consolidate ownership of the stake under JSC BGEO Investments, subject to certain regulatory and tax considerations.

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