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Pepkor, a South African clothing and furniture retailer linked to billionaire businessman Christo Wiese, has purchased a majority stake in Grupo Avenida S.A., a Brazilian retailer, from Kinea Private Equity and the founding Brazilian Caselli family.
The group revealed in a voluntary announcement that it had completed the acquisition of an 87-percent stake in the Brazilian retailer Grupo Avenida S.A. through one of its wholly-owned subsidiaries.
As it continues to invest in future growth, the South African retailer stated that the transaction aligns with its vision to become a globally respected discount and value retailer.
The management believes that the transaction provides an ideal platform for Pepkor to enter the Brazilian market, Latin America’s largest economy, and significantly expand Avenida in Brazil over the next few years.
The transaction will be completed on Feb. 4 through the acquisition of shares from Kinea Private Equity and the Caselli family, as well as a simultaneous subscription for new Avenida shares for a total cash consideration of less than four percent of Pepkor’s market capitalization.
Following the deal, the Caseli family will retain the remaining stake in the company, with the two Caseli brothers, Christian and Rodrigo, continuing in their roles as director and CEO, respectively.
Pepkor CEO Leon Lourens commented on the transaction, stating: “Off our strong base in Africa, we are excited about this next chapter for Pepkor to enter a new geography with enormous growth potential.”
“Pepkor has demonstrated success in the international expansion of its business model in the past, and the combination of Avenida and Pepkor will bring together the required capital, retail synergies, and collective know-how to bolster Avenida’s future growth,” he said.
Recently, Steinhoff International Holdings, Pepkor’s majority shareholder, revealed plans to sell its stake in the company as part of a strategic move to reduce its €9.83-billion ($11 billion) debt burden.
