Naspers, which started investing in Avito in 2013, is now buying shares from existing shareholders to increase its stake from 17.4% to 67.9% on a fully diluted basis.
From a generalist classifieds platform, Avito has in the last two years 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.
As one of the top ten Russian websites by traffic, Avito sports around 35 million unique monthly visitors and 8.6 billion monthly page views. The company posted annual revenues of $76.5m (up 76% YoY) and an ebitda (earnings before interest, taxation, depreciation and ammortisation) margin of 50.6% in 2014.
Naspers chief executive officer Bob van Dijk said the deal further strengthens the South-African based company’s position as global leader in online classifieds and is a continued commitment to a very attractive business.
“As an early investor, we are excited about the long-term prospects of Avito. 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”.
In Russia Naspers also owns about 29% of Moscow-based Mail.Ru Group.
Avito’s management will remain invested.
The transaction is subject to approval by anti-trust 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.
*Fin24 is part of Media24 which is owned by Naspers.