Alibaba invests 1bn dollars to acquire remaining stake in Lazada

Alibaba is all set to acquire Kinnevik and Rocket Internet’s remaining stake in online Southeast Asian platform Lazada for around 1 billion dollars. While Kinnevik’s stake in Lazada stands at 3.6 percent, Rocket Internet holds 8.8 percent stake in the company. In April 2016, Alibaba acquired slightly less than half of Kinnevik’s shares in Lazada for 57 million dollars and Rocket Internet's 9.1 percent stake for 137 million dollars.

A statement from Kinnevik said that the 2016 transaction equated to a post-money equity valuation of 2 billion dollars for Lazada. The intended sale of Kinnevik's remaining stake in Lazada for 115 million dollars equates to an implied valuation of 3.15 billion dollars for Lazada. The company said, the transaction implies a 327 million Swedish krona (38 million dollars), or 47 percent uplift versus Kinnevik's recorded fair value per March 31, 2017. In total, Kinnevik's investment of 503 million Swedish krona (58 million dollars) in Lazada is expected to result in a gain of SEK 933million Swedish krona (108 million dollars), a cash-on-cash multiple of 2.9x and an IRR of 33 percent, as at June 27, 2017.

On the other hand, Rocket Internet added that its stake sale for 276 million dollars, equates to an implied 3.15 billion dollars valuation of Lazada. The company added that the said transaction is the result of the exercise of the put-call agreement entered into in conjunction with The company expects to gain an overall 20x money multiple on its invested capital of 18 million euros (20.4 million dollars).

Lazada is present in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Picture:Facebook/Lazada Philippines