South African media and technology giant Naspers on Friday morning announced it is upping its stake in Russian classifieds platform Avito from 17,4% to 67,9% in a deal valued at a whopping US$1,2bn (about R16bn).
In a statement, Naspers said it invested initially in Avito — which it described as Russia’s largest generalist classifieds platform — in 2013.
“Since then the company successfully expanded into classifieds verticals and is now also a leading player in five key verticals: general goods, auto, real estate (including Domofond), jobs and services,” it said.
According to Naspers, Avito has about 35m unique monthly visitors and 8,6bn monthly page views, making it one of the top 10 websites by traffic in Russia.
In the 2014 financial year, the company reported revenues of US$76,5m (up by 76% over the 2013 financial year) and Ebitda margin of 50,6%. Ebitda, or earnings before interest, tax, depreciation and amortisation, is a measure of operating profit.
“As an early investor, we are excited about the long-term prospects of Avito,” said Naspers CEO Bob van Dijk in the statement.
“The Russian e-commerce market is expected to grow significantly, with more people gaining online access. Over time, e-commerce ratios should move in line with other large countries.”
Avito’s management will remain invested in the business, Naspers said.
“We believe this deal is mutually beneficial and … we welcome Naspers’s very long-term view on Russia and especially on Avito,” said Avito co-founder and CEO Filip Engelbert in the statement.
The transaction is subject to approval by antitrust authorities and by the South African Reserve Bank.
“While the acquisition may initially be funded from Naspers’s existing cash resources and debt facilities, the group is currently evaluating suitable long-term funding alternatives and does not envisage that this transaction will materially increase its existing debt profile in the medium term,” the group said. — © 2015 NewsCentral Media
