Naspers bags all of Takealot
BILLIONS INVESTED: FINALLY GIVE IT OUTRIGHT OWNERSHIP
Expanding its presence in food delivery is one of Naspers’ core strategies
Naspers has acquired Tiger Global Management’s stake in South Africa’s largest e-commerce retailer Takealot, and now owns an effective 96% of the business. This was revealed in its provisional results for FY2018.
Management retains ownership of the remainder of the retailer, and founder Kim Reid remains as CEO. To date, Naspers has invested more than R4.5 billion in Takealot.
The transaction, completed in December 2017, saw Naspers acquire “an additional 38% interest in Takealot from noncontrolling shareholders”. Naspers settled the deal in ordinary shares worth $128 million.
Using the average exchange rate for December, the transaction was worth R1.685 billion. Naspers shares are currently trading at a lower level than they were at the end of last year.
The December transaction followed the deal in August where Naspers invested $74 million for a controlling stake in Takealot. Following this investment, it held an effective 58% interest in the business. The deal was announced in April. It says the total purchase consideration at the time was $123 million.
In February 2015, Naspers merged its Kalahari unit – once the market leader – with Takealot. Following the merger, Naspers and Tiger Global each held around 46% of the business. This wasn’t a merger of equals, however.
Naspers contributed Kalahari as well as 612 977 Naspers shares, valuing the transaction at R1.2 billion.
In 2014, when it was announced, Oliver Rippel, then the senior executive responsible for Kalahari said the two entities had to “to work together if we are to survive and prosper”. He pointed to “many years of losses on Kalahari and four years on Takealot” as a reason for the deal.
Following the merger, Naspers invested a further $54 million (then R700 million) in Takealot during August 2015 as “part of a funding round”. In the year to endMarch, Naspers says Takealot grew gross merchandise value (GMV) by 70%, in dollar terms. In rands, GMV grew by 57% in FY18, from growth of 34% in FY17. The business is still loss-making on an EBITDA basis.
Despite technical issues resulting in downtime on Black Friday last year, the retailer reported GMV of R87 million on the day.
Naspers says Takealot has expanded “its reach outside its core categories through Superbalist, its fashion and homeware business, and Mr D Food, South Africa’s leading food-delivery service”. Expanding its presence in food delivery is one of Naspers’ core strategies.
We must work together to survive.