This will see the investment firm become the majority shareholder in the bank with 67.54 per cent.
Through a non-operating holding company, Centum will go through with the acquisition process which will be completed in four months’ time once it meets statutory and regulatory approvals from Kenya’s central bank and the Competition Authority of Kenya.
In line with the firm’s strategic objective of expanding its footprint in the financial sector, Centum seeks to deliver an immaculate robust banking experience as well other financial services to all K-Rep’s clients.
“K-rep has significant potential since last years profits more than doubled. It is a platform which we believe, that with support, can significantly accelerate the growth. It has a loyal customer base and beside that we have had an interest in expanding our services in financial services,” James Mworia, Centum CEO told CNBC Africa.
K-REP, a fully licensed commercial bank was established 15 years ago and has since grown with total assets of 13.9 billion Kenyan shillings as of March 2014. With over 200,000 retail, small and medium enterprise and micro-finance customers through its 36 branches in the region, the bank generated 360 million Kenyan shillings profit after tax in December 2013 from 196 million Kenyan shillings the previous year.
The firm reported an increase of 22 per cent in its profit after tax for the year ended March 31 2014 to three billion Kenyan shillings.
“Our objective is growth and supporting our portfolios companies to grow and looking at K-Rep what we are buying is the future. What can this platform be with the appropriate level of support and what K-Rep needs is to support it from a capital base as capital has been a constraint for the bank,” Mworia said.
Centum – the largest listed private equity company in Eastern Africa has also raised its stake in real estate with an eye on double-digit returns that the sector has yielded over the past decade. The investment firm earlier in the year announced of an upcoming project dubbed, Two Rivers, in an affluent neighborhood in Nairobi that sits on 100 acres of prime property.