Johannesburg - Naspers’ announcement that it is selling its Allegro Group for R46.61 billion comes as the Polish e-commerce market matures, Vestact says in its Monday note.
On Friday, Naspers - which is targeting growth from e-commerce, said it was selling its wholly-owned Allegro Group, which includes both Allegro and Ceneo, to funds advised by private equity firms Cinven, Permira and Mid Europa for $3.253 billion.
Its subsequent Sunday statement notes: “Founded in 1999 and headquartered in Poznan, Allegro is the most popular online shopping destination in Poland with more than 20 million registered users. Allegro provides an online marketplace for companies and private sellers to sell their products to consumers, resulting in total sales of more than 850 000 items a day.”
The company employs 1 275 people across five offices in Poznan, Warszawa, Torun, Wroclaw and Kraków. Based in Wroclaw, Ceneo.pl is the most popular online comparison shopping business in Poland.
Naspers CEO Bob van Dijk, commented that Naspers invested in the company in 2008 and then “built it into a respected and successful commerce brand”.
“We are extremely proud of Allegro’s team and success, and we are delighted that Cinven, Permira and Mid Europa will lead its next chapter. Our decision to sell Allegro is consistent with our strategy to find and realise value for our shareholders.”
Vestact notes Poland is maturing as a market, transitioning towards a fully fledged member of the Eurozone (it is a member of the European Union), and growth is not expected to be huge in the coming years.
It notes Naspers’ strategy is simple, if growth exists at the pace that you expect it to, then hold or invest in it. If not, then the strategy will be to sell it.
Speaking about the rationale for buying the company, David Barker, partner at Cinven, says, “Allegro is a great business. It is a clear market leader and extremely well positioned to benefit from structural e-commerce drivers with a strong technology platform and strong reputation with its users. We are very excited to be working with management to drive the business growth and we are looking forward to be working alongside Permira and Mid Europa.”
Richard Sanders, partner at Permira, commented: “The Permira Funds have been backing internet leaders for many years. In Allegro we have found a real gem which is the pre-eminent consumer and merchant internet brand in Poland. The business has a fantastic underlying technology platform and we look forward to backing the management team to develop it further. We believe Allegro is ideally positioned to capture the next wave of growth in online and mobile commerce.”
Pawel Padusinski, partner at Mid Europa, added: “We recognise the strong organic growth opportunities available in the Polish e-commerce and retail sectors. Our investment in Allegro is consistent with our strategy of supporting leading market players with impressive track records in the CEE region. We are enthusiastic about working closely with the management team and our partners from Cinven and Permira in supporting Allegro’s further growth.”
The transaction is subject to approval by anti-trust authorities with closing expected before the end of fiscal 2017. Proceeds will be used to repay debt, fund the continued scaling of e-commerce businesses, and finance new acquisitions.
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