Naivas Supermarket, a Kenyan supermarket chain, has signed a deal to sell a 30% stake to Paris-based private equity fund, Amethis Finance, for an undisclosed amount.
Investment in Naivas is the latest Amethis investment in Kenya after the fund invested in Ramco, KenAfric and the now-defunct Chase Bank over the last ten years.
“Amethis first reached out to Naivas over a year ago, and will be the first external investor in Naivas,” the retailer said in a statement seen by Reuters Africa.
Naivas said the investment by Amethis will help it expand operations.
“Having an experienced investor with us will further strengthen the business,” Naivas’ managing director David Kimani said in a statement.
“We expect that the move will boost the local retailer’s expansion strategy that has seen it open 60 branches across the country, while also help it avoid corporate governance and management issues that have plagued retail giants such as Nakumatt, Choppies, and Uchumi,” comments Cytonn Investments.
- Naivas Acquires Nakumatt’s Assets for KSh422 million
- Retail Activity in Kenya Softens as Oversupply, Financial Constraints Weighs on Investors and Consumers
On the other hand, once the deal is approved, it is expected to help Amethis gain a foothold in the country’s retail market as well as expand to the East African region.
“In a Kenyan retail landscape where many competitors from abroad are settling in, we are proud to support a very successful Kenyan business that has a strong understanding of the Kenyan consumer,” Jean-Sebastien Bergasse, a partner at Amethis, said in the statement.
In 2019, the retail sector recorded average yield of 7.8% in comparison to the office and residential sectors with 7.5% and 5.0%, respectively, with markets such as Westlands and Karen offering relatively high returns of up to 10.3%.