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Frontier Digital Ventures strengthens portfolio with acquisition of 3 online property classifieds from Jumia

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Frontier Digital Ventures Limited (“Frontier”, ASX: FDV) recently announced the completion of multiple transactions to significantly upgrade its portfolio of market-leading online classifieds businesses in Frontier markets.

Frontier’s CEO and Founder, Shaun Di Gregorio said, “This transaction was a rare opportunity in the online classifieds space, and we are pleased that Jumia, a major African classifieds investor, reached out to Frontier with a strong desire to acquire Afribaba and complete this transaction.”

“The ultimate result for Frontier shareholders is that we have exited Afribaba and created 3 new market leaders in property verticals in Ghana, Nigeria and Angola. Our businesses are now in a significantly improved position to commence rapid monetisation.”

“The transaction also demonstrates the strength of our entrepreneur-led online classifieds model, which provides a significant advantage over competitors which are fully owned and operated remotely by major online classifieds groups, who lack the requisite local expertise and network.”

Jumia assets acquired
Under the agreement, Frontier will acquire Jumia’s 100% interests in Jumia House Ghana, Jumia House Nigeria and Jumia House Angola (“Jumia Assets”). The Jumia Assets have strong listings, sessions and advertiser customer bases and retain strong competitive positions in each of their 3 respective markets. The monthly sessions comparison of each of the Jumia Assets is provided below in Table 1.

Table 1: Monthly Sessions (June 2017, Google Analytics)

Rationalisation of Afribaba
Frontier has agreed to sell Afribaba, a classified horizontal platform in West Africa, for an undisclosed amount to Jumia in return for the Jumia Assets. The decision was made given Jumia’s significant interest in acquiring Afribaba and from Frontier’s perspective has facilitated the creation of 3 market leaders in Ghana, Nigeria and Angola.

Transaction structuring
Frontier has completed a number of successive transactions with Jumia, meQasa, ToLet, AngoCasa and Afribaba to ultimately vend the Jumia Assets into its existing investment.

Table 2: Transaction overview

Integration Process
Under the agreement, the Jumia Assets will commence redirecting all traffic through to meQasa, ToLet and AngoCasa. All existing listings will also be migrated on to Frontier’s platforms. There will be a comprehensive customer migration process over the next 2 months where existing dealers and agents will be offered new contracts or a roll forward of their existing contracts with Jumia Assets.

It is expected that the integration process will complete within a 6-month timeline.

Portfolio Optimisation
The transaction with Jumia has significantly upgraded Frontier’s overall portfolio of market-leading online classified investments. Frontier now has 12 investments at the monetisation stage (up from 10) and has reduced its investments in pre-monetisation stage businesses. The transaction is a clear demonstration of Frontier’s portfolio optimisation process in action.

 

SOURCE Frontier Digital Ventures Limited

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