Naspers in $570m Russian internet deal

SA media juggernaut Naspers is set to create the world’s third biggest classified site by merging two of its Russian online classified sites with Avito in a $570 million deal, according to the Financial Times.

The deal would see Naspers merge its established classified entities, Slando.ru and OLX.ru, into the Avito brand, along with a $50 million cash injection for an 18.6% stake in the new company, the FT said.

In November, Naspers CEO Koos Bekker said that the company would make as many as 20 more acquisitions in e-commerce leading up to March, after making US530 million (R4.7 billion) in acquisitions in the six months leading up to September 2012.

Additional investors in Avito include Swedish financial service entities Kinnevik Investments and Vostok Nafta, Northzone Ventures; Baring Vostok, a Russian private equity house, and US-based Accel Partners. Four companies invested $75 million into Avito.ru in May 2012.

According to the FT, Avito is expected to hold 25% share of the Russian classified market in terms of traffic and 15% in revenue. Last year the company generated $30 million in sales.

Avito boasts 140,000 users listing items each day, with 40,000 of those first time users. The site also has 4,000 small businesses that pay the site to set up “stalls” in order to sell their goods.

The FT said that a merger deal would see Aavito ranked only behind US firm Craigslist.com and China’s 58.com as the third largest classified site in the world.

Naspers could not be contacted for comment on the deal.

Naspers is an active player in the online market in Russia, through its 29% investment in Mail.Ru Group, the largest Internet company in the Russian-speaking world.

The group recently reported a 39% rise in revenue for the full year ending December 2012, to RUR 21.2 billion.

Ebitda grew 38% to RUR11.53 billion, while net profit increased 37% to RUR 8.5 billion for the reporting period ended December 2012.

The group said the monthly audience of its Mail.Ru portal in December 2012 reached 33.3 million Russian users.

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Naspers in $570m Russian internet deal