Largest Baltic IT company sold for 25,5 mEUR

Although MicroLink, the leading Baltic IT services company based in Estonia, Latvia and Lithuania, was sold to local telcos already in the spring, the price of the deal – 25,5 mEUR – came public only now. Some valuation multiples compared to the 2004/2005 financial year results (running from July to June) were:

  • 0,7 times revenues (35,5 mEUR)
  • 9,8 times EBITDA (2,6 mEUR)
  • 19,6 times net profit (1,3 mEUR)

Up to you to decide if the price was right. Comparing to the revenue multiples, you would expect a higher valuation. Then again, the markets for IT services companies are hard, profit margins have been low for years and there is no reason that should change, so based on EBITDA/net profit the price seems about right.

Today, December 31st, is also my last day at MicroLink. The almost 4 years have been a lot of fun, working with the best IT people and most interesting customers in the region. I hope that over the next years MicroLink will keep its leading position on the market, but as we will see continuing consolidation across Europe, the main goal will be breaking outside the Baltic region to serve customers in Scandinavia, Western Europe and why not Russia. If MicroLink will not do that, someone else will.

Having been an enterpreneur already twice in my life, I have for some time wanted to get back in the world of startups. I believe there are a lot of good ideas and smart people here in the Baltics, so I will be incubating and supporting some of these under Customix. And may be developing some services and apps myself as well.