Just two months after Naivas sold some 40 per cent of its stakes to a consortium of investors, the retailer is now valued 10 times its value.
In what is arguably one of the largest premium paid to a local business in Kenyan history, figures shared by IBL Group show that Naivas Limited is currently valued at Sh45.6 billion up from Sh4.56 billion at the end of June 2021.
In addition, the retailer made a net profit of Sh2 billion in the financial year 2020-2021 from sales of Sh65.1 billion – representing a net margin of 3.18 per cent and an increase of 1.28 per cent in net margin in the previous financial year in which it registered a net income of Sh1 billion on sales of Sh54 billion.
Explaining why they paid a high premium to Naivas Limited desite registering low net margins, IBL said the price for the acquisition was determined in reference to multiple earnings and negotiations between the respective parties.
In order to acquire the majority stakes, IBL teamed up with French and German development finance institutions Proparco and DEG respectively to pay Sh18.25 billion.
Naivas also sold 8.5 per cent of its stakes to IBL consortium for an estimated Sh3.8 billion.
