Supermarket chain Quickmart plans to sell up to 57.5 percent of its stake through the Nairobi Securities Exchange (NSE). The sale, subject to approval from the Capital Market Authority (CMA) and NSE, will provide a multi-billion-shilling partial exit route for private equity firm Adenia and its founders. Quickmart's owners, Sokoni Retail Kenya Limited (SRKL), will sell 2 billion shares equivalent to a 50 percent stake, with an option to sell an additional 7.5 percent if demand increases.
The sale marks a rare move for a private equity firm, which typically sells shares to high-net-worth investors or their peers. Adenia invested in Kenya's retail sector in 2018, taking over Tumaini and Quickmart, which were merged in 2019. The firm sought to bet on a sector that had witnessed turmoil after several Kenyan supermarkets went bust or exited. Quickmart has since launched a breakneck expansion, becoming the fastest-growing supermarket chain in Kenya.
Quickmart's Chief Executive Officer, Peter Kang'iri, is selling part of his stake in the retail chain, along with other core investors. Adenia will remain the anchor shareholder at the supermarket. The company posted a profit of Sh1.7 billion in the year to December and promises to share 80 percent of its profits with investors as dividends. The sale will provide liquidity to shareholders and widen investors' choice in a market dominated by a few counters.
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's initial growth strategy was two-fold, involving replacing the founding family with professional management and striking better deals with Kenyan suppliers.
Quickmart has acquired significant scale, providing it with bargaining muscle, and has become the second-largest retailer after Naivas. The company's growth and ownership mirror that of rival Naivas, which sold a stake to Mauritius-based IBL Group in 2022. 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.
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 recent listings. Quickmart will become the second listed supermarket at the NSE, joining Uchumi supermarket. The company's sale of part of its stake through the NSE will provide Kenyans with the opportunity to own a share of a business they already shop in.
Quickmart posted sales of Sh50.4 billion in 2024, up from Sh29.3 billion in 2021, and has 72 branches in 16 counties. The company intends to open up to 15 stores this year and has been ranked by Financial Times as one of Africa's fastest-growing companies. The deal is expected to provide a multi-billion shilling payout to shareholders in a stock market that has witnessed a boom on the back of increased investor participation.
Key points
- Quickmart to sell up to 57.5 percent stake through Nairobi Securities Exchange
- Adenia to remain anchor shareholder after partial exit
- Deal marks rare move for private equity firm, providing liquidity to shareholders
