Naspers has R145-billion war chest for deals, CEO says
Naspers remains on the lookout for acquisitions even as economies around the world grind to a halt in the face of the coronavirus pandemic, with online education proving a hit as schools close and lockdowns keep people at home.
Africa’s biggest company, an e-commerce investor with assets from Brazil to India and China, has access to about US$8-billion (R145-billion) in cash and debt for deals, CEO Bob van Dijk said in an interview.
“People are forced to be at home in many instances at the moment, and online education platforms are doing very well,” the CEO said. “There is a lot of activity going on, and we are seeing initial opportunities. You could see us grab some of them, but we will continue to be diligent to make sure we catch the right ones.”
Naspers spun off its international Internet businesses into Amsterdam-listed Prosus last year, with the Cape Town-based company retaining a majority shareholding. The jewel in its crown is a 31% stake in Tencent, China’s biggest company, which it backed as a start-up. The company also has interests in food delivery, fintech and classified advertising as well as other online-focused businesses.
Naspers’s classifieds business has seen a slump in traffic as economic growth is hammered by the virus, while food delivery has struggled with supply issues even in many countries where it’s exempt from lockdown regulations. However, online businesses may emerge stronger from the crisis if people permanently change the way they work and educate themselves, according to Van Dijk.
“I think we will find that the outbreak will actually be a catalyst for more online activity in the world,” he said.
Naspers shares have gained 13% this year, valuing the company at R1.1-trillion.
The company’s online education sites include Brainly and Udemy in the US, while in late 2018 the company led a $540-million investment in India’s BYJU. Codecademy, specialising in digital education, is offering scholarships for people stuck at home and wanting to add to their skill set, Van Dijk said.
“We have a strong cash position — even in the worst case scenario, we have the balance sheet to weather the storm,” the CEO said. “We have the capacity to do further M&A, and that gives us a lot of confidence in the future.” — (c) 2020 Bloomberg LP