Asseco Poland launches shares in Czech arm on road to regional expansion UPDATE

WARSAW (Thomson Financial) - IT services company Asseco Poland plans to raise 50-100 mln zlotys by floating its new Czech arm on the Warsaw stock exchange in December as it seeks to build on a recently sealed mega-merger on its home market.

Asseco, which last week completed a tie-up with peer Prokom that will make it central Europe's biggest player in the sector, said it would also use some of the funds from the issue to fund the development of its Austrian arm.

Asseco Czech Republic, which controls 3.1 pct of the fragmented Czech IT market, specializes in business IT outsourcing and lists the Czech Finance Ministry as well as the country's biggest bank CSOB among its clients.

The company almost tripled its net profit in the first half of 2007 to 25.1 mln Czech crowns, while sales rose year-on-year by 2.4 pct to 482.4 mln.

Its officials said they wanted to use some of the IPO money to develope its Austrian arm through two possible acquisitions planned for next year.

'Creating the group's new pillar in Austria is our main target for 2008,' said Jan Prerovsky, Asseco Czech Republic's chief executive.

'We're in talks with one mid-sized Austrian IT company and we hope to end the process until the first quarter of 2008,' added Jozef Klein, head of Asseco Czech Republic's supervisory board.

'We'll seek to add one more Austrian company in the future.'

Poland's IT market is valued at 3.1 bln eur, compared to a combined 2.7 bln eur in the Czech Republic and Slovakia.

Outside Poland, Slovakia and the Czech Republic, Asseco, valued at 3.6 bln zlotys, also operates in Romania, Germany, and Lithuania and is searching for possible acquisitions in the US, Ireland, Austria, France, and the Balkans.

The Polish company said last month it planned to buy 10 or more software providers for around 500 mln zlotys over the next six months, possibly financed by share issues.

Most of Central Europe's former communist economies are growing by at least 5-6 pct annually on the back of inflows of EU aid and foreign investment as well as booming domestic economies.

Asseco group runs a policy of floating its subsidiaries on the Warsaw Stock Exchange.

Asseco Czech will be the fourth after Asseco Poland to make its debut in 2004, last year's newcomer Asseco Slovakia, and Asseco Business Solutions which is also to be floated before the end of this year.

Shares in Asseco Poland fell 0.13 pct to 77.9 zlotys today, underperforming Warsaw's broad WIG index, which rose 2.13 pct.

Source: Adrian Krajewski, forbes.com