Supermarket chain Quickmart will sell up to a 57.5 percent stake through the Nairobi Securities Exchange (NSE), providing a multi-billion-shilling partial exit route for private equity firm Adenia and its founders.The supermarket announced on Wednesday that its owners—Sokoni Retail Kenya Limited (SRKL)—will sell 2 billion shares equivalent to a 50 percent stake and are open to selling an additional 7.5 percent in the event of increased demand.Sokoni Retail Kenya Limited is owned by Adenia and the founders of Quickmart and Tumaini Supermarket—which were merged in 2019.The Chief executive officer of Quickmart, Peter Kang’iri, is selling part of his stake in the retail chain.All four core investors will sell part of their shares, with Adenia remaining the anchor shareholder at the Supermarket.In its offer, the chain, which posted a profit of Sh1.7 billion in the year to December, is promising to share 80 percent of the profits with investors as dividends.The sale through the NSE is a boost to the bourse, which this year ended a listing drought that lasted years following the Kenya Pipeline Company IPO and the entry of Family Bank through introduction.This has widened investors’ choice in a market where five counters—Safaricom, Equity Bank, KCB, EABL and Cooperative Bank—dominated trading, masking the overall performance of the bourse.The sale is subject to approval from the Capital Market Authority (CMA) and NSE.“The existing shareholder group intends to retain a substantial interest in the Company following the Offer, reflecting our continued confidence in the Company and its long-term prospects,” said Martha Osier, a partner at Adenia, in a statement.The Shareholders are in line for a multi-billion shilling payout in a stock market that has witnessed a boom on the back of increased investor participation.“The shares to be sold by SRKL under the Offer will be sold in a manner that results in a pro rata partial exit by the shareholders of SRKL. Following completion of the Offer, if the over-allotment option is not exercised, SRKL is expected to retain approximately 50 percent of the Company’s issued share capital. If the over-allotment option is exercised in full, SRKL’s remaining shareholding would reduce to approximately 42.5 percent,” the statement reads.Quickmart will become the second listed supermarket at the NSE, joining the struggling Uchumi supermarket.The sale of part of Adenia’s stake through the NSE marks a rare move for a private equity firm, which typically sells shares to high-net-worth investors or their peers.“Listing on the NSE will give Kenyans the opportunity to own a share of a business they already shop in, while raising our profile with suppliers and partners as we continue to deliver on our growth strategy,” Mr Kang’iri said in a statement.The deal aligns with PE funds’ strategy of staying in a business for five to seven years, with an average holding period of about six-and-a-half years.This timeframe allows the firm to restructure, build value, and prepare the company for a profitable exit.Adenia invested in Kenya’s retail sector in 2018, taking over not one but two family-run concerns.In 2018, it bought Tumaini. The following year, after adding five new stores, it acquired the Quickmart business, bringing the total to 24 outlets.Adenia sought to bet on a sector that had witnessed turmoil after several Kenyan supermarkets, including Uchumi, Nakumatt and Tuskys, had either gone bust or were about to do so as foreign retailers such as Shoprite and Game exited.Read: Why QuickMart cannot recover Sh15m from Sh94.9m transit heistQuickmart launched a breakneck expansion that at first saw it open a branch nearly every month to become the fastest-growing supermarket chain in Kenya.Financial Times ranked it this year at number 97 among Africa’s fastest-growing companies in a top 100 list that had 17 companies from Kenya.Quickmart posted sales of Sh50.4 billion in 2024 from Sh29.3 billion in 2021.It has 72 branches in 16 counties and intends to open up to 15 stores this year.While taking over Tumaini and Quickmart, Adenia judged Kenya a nascent retail market with potential to grow in both scale and sophistication.Adenia’s initial growth strategy was two-fold. First, it replaced the Kinuthia founding family with professional management. It brought in Mr Kang’iri, with a background in retail, logistics and finance, as chief executive, and Jacques Dôme, who had been in retail in Dubai for 15 years, as his deputy. Members of the Kinuthia family retained two seats on the seven-member board.Second, it sought to strike better deals with Kenyan suppliers, many of which enjoy dominant market positions.Quickmart, now the second-largest retailer after Naivas and ahead of Carrefour and Chandarana Food Plus, has acquired the scale that has provided it with the bargaining muscle.Its growth and ownership mirror that of rival Naivas.In 2022, France’s Amethis investment fund sold its stake in Naivas to Mauritius-based IBL Group.Amethis bought a stake in Naivas for an undisclosed amount in 2020, which has remained under the control of the Mukuha family since 1990.Naivas became a top retailer after the collapse of Nakumatt, which had dominated the sector.Nakumatt’s failure has also created an opening for other chains like Quickmart and Carrefour.Quickmart is presently the second-largest retailer after Naivas, which has over 100 branches.The sale of Adenia shares via the NSE will mark a rare deal as PEs have traditionally steered clear of public markets as a departure route.Liquidity concerns and a burdensome listing process have previously been cited as reasons for few to non-existent PE exits via public markets.The 2024 Deloitte Africa Private Equity Confidence Survey showed that 56 percent of PE firms preferred secondary sales to their peers, while 32 percent favoured selling to strategic investors or partial exits.The NSE has yet to record a listing from a PE firm/fund in the recent past, but its struggles to register new initial public offerings (IPOs) have eased with the listing of KPC, Family Bank and Shri Kishana Overseas Limited over the past year.kmuiruri@ke.nationmedia.comkmwangi@ke.nationmedia.comFollow our WhatsApp channel for the latest business and markets updates. Provided by SyndiGate Media Inc. (Syndigate.info).
