Shoprite sells furniture business to Pepkor for $268 million
Shoprite, South Africa's largest grocery retailer, has agreed to sell its furniture business to discount retailer Pepkor. The deal includes the OK Furniture and House & Home brands but excludes operations in Angola and Mozambique.
Transaction snapshot
Deal value: Estimated $268 million (ZAR 3.2 billion)
Deal multiples: 0.44x revenue
Deal type: Acquisition
Investors: Pepkor
The sale represents about 4% of Pepkor's market capitalisation, which stood at $6.76 billion (ZAR 80.49 billion) on Monday. Pepkor will acquire over 400 stores across South Africa, Botswana, Lesotho, Namibia, Eswatini and Zambia. The deal also includes Shoprite's furniture credit loan book, related insurance arrangements, inventory and certain fixed assets.
Shoprite CEO Pieter Engelbrecht explained the decision to sell, citing a focus on core grocery operations. He noted that the furniture business's future growth and profitability were limited by investment needs that would have diverted resources from food retail operations.
The furniture business contributed $605 million (ZAR 7.2 billion) or 3% to Shoprite's total sales of $20.22 billion (ZAR 240.7 billion) in the last full year.
Pepkor, which already operates six household furniture, appliances and consumer electronics retail brands under its Lifestyle business unit, sees the acquisition as an opportunity to expand its value proposition and regional presence.
The deal is expected to complement Pepkor's existing product mix in furniture, bedding, appliances and consumer electronics, while also strengthening its foothold in under-represented regions.
