The Kazakhstan-based company Kaspi.kz is preparing a new deal in the Ukrainian market. According to the own sources of AIN.UA, the IPO company is carrying on negotiations with the management of the third Ukrainian company it wants to merge with. Its main target in Ukraine is the national largest online retailer Rozetka, which owns, besides Rozetka company and marketplace, the EVO group (Prom.ua and other projects).
Why would Kaspi.kz buy a Ukrainian e-commerce company
After the IPO, Kaspi.kz raised about $1 billion and planned to invest in expansion to new markets. It considered the Ukrainian market as the most promising one.
Kaspi.kz already has half of its local market, being the biggest market player there. The company developed the Kaspi.kz SuperApp where users can order dozens of different services.
After the IPO, the company’s shares are continuously growing; its market capitalization hits $20 billion. For further growth, the national market isn’t enough. So the company is trying to replicate its success in a new market. Ukraine is a big and empty market at the same time.
So, it is obvious what company it chooses to merge with. In Kazakhstan, it generally works in two industries — e-commerce and banking/finance. By buying a Ukrainian national marketplace, it will be able to enter a new market and take a lead quickly.
AIN.UA private sources said Kaspi.kz already negotiates with the actual owners of Rozetka. The legal firm Avellum is likely responsible for the due diligence of this deal, according to the research company Molfar. Avellum has already assisted Kaspi.kz in the Portmone deal, Rozetka and EVO, and in some other deals of the Rozetka’s investor, Horizon Capital VC firm.
Now our sources are skeptical about the possibility of signing the deal. However, they also mention that “Kaspi.kz wants only Rozetka.” Both parties refused to comment on the situation.
Why Kaspi negotiates acquiring Rozetka
- Rozetka is one of the most valuable and most famous local brands in Ukraine.
- With its large client base, the website is one of the TOP 10 in Ukraine, even without EVO.
- Its revenue is ₴18 billion, or almost $670 million.
The two most popular marketplaces in the country sell all kinds of goods. Moreover, Rozetka is developing its own delivery service, parcel locker network, and points of delivery. Kaspi.kz needs exactly this company as the last missing link to replicate the success of SuperApp in Ukraine and combine financial services and online trade.
If the deal will be successful, Rozetka will be the third asset Kaspi acquired in Ukraine. As previously mentioned by AIN.UA, the Kazakhstan company purchased Portmone. The deal, according to AIN.UA sources, could cost up to $20 million. The purchase of BTA Bank could cost from $5 to $11 million. It purchased the bank to get a license and Portmone for a quick partnership with Visa and Mastercard.
Unlike the previous two deals, now Kaspi buys an e-commerce company not only for licenses but rather for its large user base and well-known brand. Instead of acquiring a startup and developing it for several years. Moreover, all the biggest national players are big and known enough, so a new player would have complications and, what is more important, must spend a lot of time and money to win the market share.
In addition, Kaspi.kz plans to build a tech hub and create a large IT department in Ukraine.
What can be the price of Rozetka?
According to different calculations and including market multipliers, the value of Rozetka can vary from $600 to $889 million. On the one hand, it is too much for that market. On the other hand, there is always a premium for the market leader. Provided that it is in a good shape.
According to the sources of AIN.UA, Kaspi.kz has funds for this deal, but it would be its total M&A budget. So if the deal will actually happen, Kaspi.kz will highly likely borrow funds.
Based on the available information, Kaspi negotiates acquiring Rozetka but the parties still have not agreed on the terms of their deal.
