425: Cohen Circle Acquisition Corp. I Announces Business Combination Agreement with Kyivstar Group Ltd.

Cohen Circle Acquisition Corp. I (CCIRU) and Kyivstar Group Ltd. have entered into a business combination agreement to list Kyivstar on the Nasdaq, creating a U.S.-listed pure play Ukrainian investment opportunity.

Summary

• Cohen Circle Acquisition Corp. I (CCIRU) and Kyivstar Group Ltd. have announced a definitive business combination agreement.
• The agreement will result in the listing of Kyivstar, a leading digital operator in Ukraine, on the Nasdaq Stock Market under the ticker symbol KYIV.
• VEON will retain a minimum of 80% ownership of Kyivstar Group following the completion of the business combination.
• The transaction assigns a pro-forma valuation of USD 2.21 billion to Kyivstar at closing.
• The business combination is expected to close in Q3 2025, pending Cohen Circle's shareholder approval and other customary conditions.

Sentiment

Score: 8

Explanation: The document presents a positive outlook for Kyivstar's future, highlighting its strong market position, growth potential, and attractive valuation. While acknowledging the risks associated with the war in Ukraine, the overall tone is optimistic and confident in the company's ability to overcome challenges and deliver value to investors.

Positives

• Kyivstar is a leading digital operator in Ukraine with a strong customer base and diverse service offerings.
• The listing on Nasdaq will provide a unique U.S.-listed pure play Ukrainian investment opportunity.
• VEON will maintain a significant ownership stake, ensuring continued support and strategic alignment.
• The transaction is expected to enhance Kyivstar's access to capital and growth opportunities.
• Kyivstar has committed to invest USD 1 billion into the development of new telecom technologies in Ukraine over 2023-2027.

Negatives

• The business combination is subject to shareholder approval and customary closing conditions, which could delay or prevent the transaction from being completed.
• The ongoing war in Ukraine poses significant risks to Kyivstar's operations and financial performance.
• The telecommunications industry is highly competitive and subject to rapid technological changes.
• Regulatory and legal uncertainties in Ukraine could adversely affect Kyivstar's business.

Risks

• The ongoing war in Ukraine poses significant risks to Kyivstar's operations, including potential damage to infrastructure and disruptions to services.
• The business combination is subject to shareholder approval and customary closing conditions, which could delay or prevent the transaction from being completed.
• The telecommunications industry is highly competitive and subject to rapid technological changes.
• Regulatory and legal uncertainties in Ukraine could adversely affect Kyivstar's business.
• Cyberattacks and data breaches could disrupt operations and compromise sensitive information.

Future Outlook

Kyivstar is poised for growth with Ukrainian recovery and digital services expansion, with a focus on deepening mobile market leadership and expanding digital services.

Management Comments

• Augie K Fabela II, Chairman and Founder of VEON, stated that Kyivstar's listing on Nasdaq will mark a defining moment for Ukraines economic future.
• Kaan Terzioglu, VEON Group CEO, believes that Kyivstar's strong financial profile, visionary strategy, and robust governance structure will be appealing to international investors.
• Oleksandr Komarov, CEO of Kyivstar, looks forward to completing the Business Combination with Cohen Circle to embark on the next phase of Kyivstars growth.
• Betsy Cohen, Chairman and CEO of Cohen Circle Acquisition Corp. I, stated that Kyivstar is an inspiring business and a significant investment opportunity.

Industry Context

The announcement comes as the telecommunications industry is undergoing rapid technological changes and increasing competition. Kyivstar's focus on digital services and 4G connectivity aligns with industry trends and positions the company for future growth.

Comparison to Industry Standards

• The transaction is proposed at 3.6x EV/2024P Underlying Adj. EBITDA, offering a significant discount to peers.
• The average EV/EBITDA multiple for European peers is 6.6x, while for APAC peers it is 6.1x.
• Kyivstar's 2024 EBITDA margin of 56.0% is comparable to or higher than many global peers.
• Kyivstar's monthly ARPU of US$3.6 is lower than the average of Central and Eastern European countries, indicating potential for growth.

Stakeholder Impact

• Shareholders of Cohen Circle will have the opportunity to invest in a leading Ukrainian digital operator.
• VEON will maintain a significant ownership stake in Kyivstar Group, ensuring continued strategic alignment.
• Kyivstar's employees will benefit from the company's growth and expansion.
• Customers will continue to receive high-quality telecommunications and digital services.
• The transaction is expected to support the economic development of Ukraine.

Next Steps

• Cohen Circle will seek shareholder approval for the business combination.
• Kyivstar Group will file a registration statement with the SEC.
• The parties will work to satisfy customary closing conditions and obtain necessary regulatory approvals.
• The business combination is expected to close in Q3 2025.

Key Dates