Prosus is disposing of Avito, its Russian classifieds business, for approximately R45 billion (RUB 151 billion) to Kismet Capital Group.
The Kismet group is an investment vehicle controlled by Ivan Tavrin, a prominent Russian investor and entrepreneur, which has interests in technology and telecoms businesses.
The Avito disposal has since received approvals from Russian anti-trust and financial regulatory authorities, according to Prosus.
“Prosus has entered into an agreement through its affiliates OLX Global, OLX, KEH Holdings and MIH Technology Holdings (together, the sellers, all of which are indirect subsidiaries of Prosus) with Radio Reklama Vologda and Infrastructure Holding-2 (together the purchasers, both of which are subsidiaries of Kismet Capital Group and are beneficially owned by Ivan Tavrin),” the company told shareholders on Friday.
Prosus has in the past few months been seeking to offload Avito due to the ongoing Russian and Ukraine war. CEO Bob van Dijk in June lamented the impact of war in Ukraine on its Russian business.
“Our classifieds business has been deeply impacted by Russia's invasion of Ukraine. We are appalled by the war in Ukraine and we continue to do all we can for our Ukrainian employees and the people of Ukraine. Consequently, in March 2022, we announced the separation of the Russian classifieds business Avito from our OLX Group,” he said at the time.
According to the latest figures from Reuters, at least 29 916 people have been killed as result of the war, 53 616 people have suffered non-fatal injuries, approximately 14 million people have been displaced, 140 000 buildings have been destroyed and property damage is pegged at almost $350 billion.
The Prosus business in Russia was founded by Jonas Nordlanderr and Filip Engelbert in 2007. Avito offers a web-based platform for free online classified advertisements in that country.
Buyers and sellers use its line of business for the exchange of products and services, such as coins, collectibles, computers, memorabilia, stamps and toys, as well as concert and sporting tickets.
The Avito classifieds site in Russia hosts around 90 million active adverts and moderates around five million new listings every day, according to Prosus.
Prosus holds an effective interest of 99% in the Avito Group. As at 31 March 2022, being the latest financial year-end for Naspers and Prosus, the net asset value of the Avito Group was $1.39 billion (R25 billion) and profit attributable to the Avito Group was $160.3 million (R2.9 billion).
In the notice to investors, the company said the Avito/Kismet deal is expected to close later this month.
Prosus explained the transaction: “Pursuant to the agreement, the purchasers will acquire the Avito Group from the sellers for an aggregate consideration of RUB 151 billion.
“The aggregate consideration for the acquisition of the Avito Group by the purchasers will be satisfied by the purchasers through a mixture of available cash resources and debt financing procured by the purchasers.
“The Avito Group disposal will involve the disposal and transfer by the group of the following entities comprising the Avito Group: (i) KEH eCommerce (a Russian incorporated entity) and its subsidiaries; and (ii) Avito Holding (a Russian incorporated entity) and its subsidiaries.”
Commenting on the transaction, Tavrin said in a press release: “Avito is not only an exceptional business with a clear strategy and a professional management team, but it also has a wealth of talent and intellectual capital.
“For Kismet, Avito is a strategic investment that aligns fully with our principles of investing in high-tech market leaders with significant growth potential.
“We are pleased to partner with Naspers on this transaction and intend to maintain the strategy of developing Avito as the largest independent platform, while also upholding the best management and motivational practices within the company,” noted Tavrin.
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