Naivas Supermarket Raises Sh 6 Billion From Selling 30% of Its Stake
Kevin Namunwa  |  Aug 3, 2020

Supermarket chain Naivas has raised Ksh 6 billion from the sale of a 30% stake to a group of investors valuing the retailer at Ksh 20 billion.

Naivas sold the 30% stake to International Finance Corporation (IFC), private equity firms Amethis and MCB Equity Fund, and German sovereign wealth fund DEG. The amount paid in the deal is one of the largest in the regional retail space.

Although the breakdown of the stakes held by the institutional investors is not yet clear, IFC said it invested Sh1.6 billion while DEG said it provided Sh1 billion.

Amethis and MCB Equity Fund are yet to reveal the size of their participation in the deal.

“Naivas is majority-owned by the Mukuha family who as part of this transaction will dispose part of their shareholding to a special purpose vehicle owned by IFC, Amethis and other co-investors,” IFC said ahead of the deal’s conclusion on February 25, “The Mukuha family will remain in the business as the main shareholders.”

According to a valuation by Massmart, a South Africa-based subsidiary of retail giant Walmart, the Sh 6 billion is nearly twice what an investor would have paid for a similar stake in 2013.

Massmart sought to buy a 51% stake in Naivas for Sh3 billion, but the deal collapsed following a shareholder row in the family-owned supermarket.

Massmart had valued Naivas at Sh 5.88 billion meaning the supermarket chain has increased its value nearly four times over the seven years. Naivas has managed to grow in a sector where top local chains such as Nakumatt and Choppies struggled to remain afloat.  

While Naivas has raised growth capital, its main rival Tuskys is fundraising to avoid bankruptcy.

Tuskys says it needs Sh2 billion to survive in the short term and that it has received interest from several unnamed investors, including a private equity firm that has existing operations in the retail business.