Mr Price Group (MRP) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of NKD provides a platform for offshore expansion into Central and Eastern Europe, leveraging a proven value retail model and aligning with the buyer's value-focused growth strategy.

• NKD operates in a high-growth value apparel and homeware sector, with strong brand recognition and a skilled local management team.

• The deal enables access to large, growing European markets, diversifying geographic exposure beyond South Africa and Africa.

• Cultural and operational alignment between both management teams was a key factor in the decision, supporting seamless integration.

• The acquisition is transformational, supporting long-term growth ambitions and superior returns over the next decade and beyond.

Financial terms and conditions

• Maximum purchase price is €487 million (approx. R9.66 billion), covering 100% of shares and shareholder loan receivables, both subject to escalation until closing.

• Base purchase price for shares is €415 million, with an additional €38.5 million for shareholder loan receivables.

• Transaction is fully funded by internal cash and new debt, with a targeted debt to EBITDA ratio of 1–1.5x.

• Currency risk has been hedged to protect against exchange rate volatility.

• The deal is not expected to be earnings accretive in year one due to transaction costs, but is anticipated to deliver long-term value.

Synergies and expected cost savings

• NKD’s data-driven tools and sourcing capabilities are expected to enhance group margins and operational efficiency.

• Both companies’ cash-based, private label, omnichannel models create operational synergies.

• No significant short-term synergy benefits expected; focus is on long-term value creation.