South African retail giant buying international company for R9.7 billion
Mr Price is acquiring European value retailer, NKD GROUP GMBH, in a deal worth around R9.66 billion.
The group has entered into an agreement to acquire 100% of the shares of Pegasus Group Holding GmbH, which trades as the retail business of NKD Group.
NKD has a 60-year history of operating a European value apparel and homeware retail business, with its head office in Germany.
The company has over 2,100 stores across Germany, Austria, Italy, Croatia, Slovenia, the Czech Republic and Poland. It has 10,000 employees.
The company generated net sales of €684.57 million for the financial year ended 31 December 2024.
“NKD has a clearly differentiated value positioning, targeting quality and price-conscious customers, with a predominantly private label range offering that serves the whole family and carries minimal fashion risk,” said Mr Price.
“NKD achieves sustainable profitability by operating smaller-format stores with an average store size of 300sqm.
Mr Price added that the company has lower rental costs as it focuses on smaller towns and has a lean approach to capital expenditure, labour and logistics.
The group added that NKD’s supply chain strength has supported gross margin expansion, with its technology also allowing for strategic and profit-accretive decision-making.
It added that NKD’s management team is highly seasoned, with a strong track record and a business culture that aligns with the Mr Price Group.
“The Business has identified significant growth opportunities across the seven existing markets in which it operates and has the appetite to pursue long-term sustainable growth across the continent.”
While massively expanding its store base in South Africa since 2021, the group has researched new areas for growth.
Research shows that value retailing is outpacing the global total retail market, with value retailing accounting for 22% of the total European retail market.
The acquisition would boost Mr Price’s revenue to R53 billion, store numbers to over 5,000 and employees to over 40,000.
“We have spent a considerable amount of time researching markets and assessing opportunities,” said Mr Price’s CEO, Mark Blair.
“After meeting the NKD team, it was evident that this was the right business to pursue. Like us, they are value retailers at heart and have a very clear understanding of who their customer is and how to best serve them.”
“They are ambitious and performance driven, which is a natural fit to the Mr Price Group culture.”
The deal’s structure
NKD is 100% owned by Pegasus, a German limited liability company. Pegasus will then be acquired from UK-based Fliegendes Pferd by Mr Price.
Mr Price will also acquire the shareholder loan receivables extended to NKD as a borrower.
The consideration payable by Mr Price for Pegasus is €415.00 million (about R8.23 billion). This is escalated from the locked-box date of June 30, 2025, at an agreed-upon escalating rate until the transaction’s effective date.
The enterprise value of NKD, used to derive the base purchase price after adjusting for debt, debt-like items, cash, and net working capital, is €500 million (approximately R9.92 billion).
The consideration payable by Mr Price for the shareholder loan receivables is €38.50 million (approximately R763.87 million) as of the Locked-box Date. It escalates at the applicable rate until the closing date.
The aggregate of the purchase price of the sold shares and the shareholder loan receivable for the purchase stands at a maximum value of €487.00 million (approximately R9.66 billion).
The purchase consideration will be settled in cash, and Mr Price will fund the transaction via a combination of cash resources and debt facilities.
The deal is expected to go through during the course of Q2 CY2026, subject to regulatory approvals.
During the six months ended June 30, 2025, NKD reported net sales of 344.00 million (approximately R6.83 billion).
It recorded a profit after tax, excluding debt and hedging derivative valuation charges of €6.49 million (approximately R128.68 million).
The value of the net assets to be acquired as of 30 June 2025 amounts to €91.14 million (approximately R1.81 billion)
Loading ...