Softlogic Holdings Plc (SHL) is to enter the burgeoning Bangladesh retail market with the acquisition of the country’s first ever and the second largest supermarket Agora Ltd.
SHL said its subsidiary Softlogic Retail Holdings Ltd.has entered into a Sale and Purchase Agreement for the acquisition of 100% of Agora, of Bangladesh, a retail superstore that operates a chain of hypermarkets, discount department stores and grocery stores.
Agora has 18 superstores of various sizes in Bangladesh – 15 in Dhaka, two in Sylhet and one in Chattogram.
The acquisition will be via a series of transactions subject to terms and conditions set out therein and receipt of regulatory approvals.
SHL said Softlogic Retail Holdings drives the dynamic and aggressive retail sector of the Group. It encompasses synergies from multi-brand and multi-channel strategy, focused on enhancing the retail landscape in Sri Lanka.
Softlogic Retail Holdings operations include branded apparel, consumer electronics, mobile handset retails and distribution, supermarkets and quick service restaurants.
SHL’s retail sector accounted for 54% or Rs. 45 billion of Group revenue in the first nine months of FY22.
The retail sector revenue improved with a strong 44% growth to Rs. 16.9 billion during the third quarter while the cumulative turnover figure reported a growth of 49% to Rs. 45.3 billion. Cumulative sector EBITDA rose 88% to Rs. 4.3 billion while the quarter witnessed a 94% surge to Rs. 2.3 billion for the retail sector.
Retail sector delivered another quarter of strong progress as cumulative PAT recorded a remarkable YoY turnaround to report Rs. 441.1 million compared to a loss of Rs. 1.96 billion in 1-3QFY21. Quarterly PAT reached Rs. 934 million as opposed to a loss of Rs. 139 million in 3QFY21.
The SHL disclosure did not include estimated cost of acquisition. Bangladesh media outlet The Business Standard, citing unnamed investment banking sources said the deal might be something between Tk 181 (Rs. 4.5 billion) and Tk 249 crore (Rs. 6.2 billion).
Khalid Quadir, chief executive officer and founding partner of Brummer & Partners (Bangladesh), which manages the first Bangladesh-focused private equity fund, Frontier Fund that now owns 72% of Agora, declined to disclose any number right now.
“Our investments over a decade ago helped the business and the sector in Bangladesh grow and due to the nature of international private equity investment, we have to exit now,” he said.
Softlogic has a very strong track record and expertise in the fields of ICT, healthcare, retail, financial services, automobile and leisure industries.
Quadir hopes that they will add significant value to the retail chain business in the coming days.
To offer hassle-free modern grocery shopping experience to the burgeoning upper middle class in the capital, Rahimafrooz, one of the oldest corporate houses of the country, opened the first supermarket outlet of Agora in the then Rifles Square, later named Shimanto Square, in 2001.
In the following year, Gemcon Group opened its first supermarket Meena Bazaar at a nearby location in Dhanmondi.
They, along with some other players including Nandan, were mainly catering to the affluent early adopters in buying daily essentials from a single store under the same roof. Supermarkets’ main appeal also used to include the diversity in products on shelves
