Adenia Partners, an Africa-focused private equity firm, is considering selling its majority stake in Quickmart, Kenya's second-largest supermarket chain. This potential multi-billion shilling deal could involve listing Quickmart on the Nairobi Securities Exchange (NSE), a rare move for a private equity fund that typically sells to high-net-worth investors or other PE firms. Advisers have been contacted, and discussions with the NSE are underway, though no final deal is guaranteed at this preliminary stage.
Adenia's investment strategy aligns with typical PE fund holding periods of five to seven years, with an average of 6.5 years, to restructure and build value before a profitable exit. The firm invested in Kenya's retail sector in 2018, acquiring Tumaini and later Quickmart in 2019, growing the combined entity to 24 outlets. Quickmart has since seen rapid expansion, opening branches nearly monthly, and was ranked among Africa's fastest-growing companies, posting sales of Sh46.9 billion in 2024, up from Sh29.3 billion in 2021, and now boasts 70 branches across 16 counties.
Quickmart, now the second-largest retailer after Naivas, aims to expand into other East African countries like Uganda and the Democratic Republic of Congo. Adenia previously invested about Sh3.2 billion ($25 million) to fund Quickmart's expansion, which included replacing the founding family with professional management and implementing a gender action plan, leading to the creation of approximately 2,800 new jobs since the acquisition, bringing the total to 7,313 employees in 2024 from 4,479 in 2021. The potential NSE listing would challenge the traditional PE exit route, which often avoids public markets due to liquidity concerns and burdensome listing processes.
While Adenia did not confirm or deny the stake sale talks, they indicated that they periodically review options as part of their governance. The potential sale is seen as a test for how private equity investors value modern retail assets in Kenya, considering factors like store-level profitability, same-store sales growth, EBITDA margins, lease obligations, working-capital requirements, and the ability to generate sustainable free cash flow. The competitive landscape, with Naivas as the largest player and Carrefour aggressively expanding, will also influence Quickmart's valuation.
