Naspers with a small purchase in Eastern Europe

Naspers, our favoured local technology stock has been fairly active of late. Because the company is so big, when it makes an acquisition below a certain size it doesn't have to report it so sometimes it seems like the company is not acquiring assets like it used to in the past. Of course this is not the case. Recently they took over 70% in the largest online retailer in Romania called eMAG. The value was not announced but the media reckon around 100 million Euro's was paid by Naspers. The retailer which was launched 11 years ago plans to expand further into Eastern Europe using the financial backing of the multinational giant.

This is one of many as Naspers attempts to become the Amazon of the developing market. This article from Moneyweb quotes Koos Bekker, the CEO, saying that they look to make 10 to 20 acquisitions in the year to March 2013 and that they see lots of opportunities in the e-commerce space.

According to the article a few acquisitions have already been made. "This year, Naspers has purchased majority stakes in Netretail SRO, an online retail business in central Europe, and Internet Mall AS, a Prague-based website selling household goods such as washing machines. It also invested in Resolva.me, a Brazilian site that offers ratings of dentists, lawyers and other professionals."

I checked the company's financial statements for the year ended 31 March and it states that the company is sitting on R9.8bn in cash so there is definitely room for a few more acquisitions. We really like this company and the way they go about their business. Their track record for finding little diamonds in the rough has been brilliant and the next Tencent could be just around the corner.

We also really like the e-commerce sector which has huge potential. I am sure you have all bought stuff online by now and the easier it gets and the more reliable it becomes, the demand will only increase. Yesterday I wrote about Amazon and how well their e-commerce division was doing. We are still very happy to be adding to this company and are not deterred by its high valuation in terms of earnings. This is a sum of the parts company and when you look at that way, like Sasha has broken down for you on a number of occasions, it looks cheap.