SCHEDULE 13D: Kaspi.kz Completes Over $1.1 Billion Acquisition of Controlling Stake in Turkish E-commerce Platform D-MARKET

Kazakhstan-based fintech giant Kaspi.kz has completed its acquisition of a 65.41% controlling interest in Turkish e-commerce platform D-MARKET Electronic Services & Trading for an aggregate purchase price exceeding $1.1 billion.

Summary

• Joint Stock Company Kaspi.kz (the "Reporting Person"), a Kazakhstan-based mobile products and services developer, has acquired a controlling interest in D-MARKET Electronic Services & Trading (the "Issuer"), a Turkish joint stock company.
• The acquisition involved the purchase of 40,000,000 Class A Shares and 173,246,220 Class B Shares, which were subsequently reclassified into 213,246,220 Ordinary Shares.
• Kaspi.kz now beneficially owns 213,246,220 Ordinary Shares, representing 65.41% of D-MARKET's total outstanding Ordinary Shares.
• The aggregate purchase price for the Transaction was $1,126,911,567.
• The payment was structured in two tranches: $600,000,000 in cash paid at closing on January 29, 2025, and a Deferred Cash Consideration of $526,911,567 payable no later than six months from the closing date.
• A Share Pledge Agreement was executed on January 29, 2025, where Kaspi.kz pledged 65,199,658 Ordinary Shares (20% of D-MARKET's total outstanding shares) to the sellers as collateral for the Deferred Cash Consideration.
• On January 31, 2025, D-MARKET's articles of association were amended to terminate the separate existence of Class A and Class B shares, reclassifying all shares into a single class of Ordinary Shares.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the successful completion of a significant strategic acquisition, indicating growth and expansion for Kaspi.kz. However, the deferred payment and associated share pledge introduce a moderate level of risk and future obligation, preventing a higher score.

Positives

• Kaspi.kz successfully acquired a controlling 65.41% stake in D-MARKET Electronic Services & Trading, expanding its market presence.
• The acquisition was funded using cash on hand for the initial payment, indicating financial liquidity.
• The reclassification of D-MARKET's share capital into a single class of Ordinary Shares simplifies its capital structure.

Negatives

• A significant portion of the purchase price ($526,911,567) is deferred, creating a future payment obligation for Kaspi.kz.
• 65,199,658 Ordinary Shares (20% of D-MARKET's total outstanding shares) are pledged as collateral for the deferred payment, with potential loss of voting and disposition rights if the payment is not made on time.

Risks

• **Deferred Payment Obligation**: Kaspi.kz is obligated to pay $526,911,567 in Deferred Cash Consideration no later than six months from the closing date.
• **Share Pledge and Event of Default**: If Kaspi.kz fails to pay the Deferred Cash Consideration within six months of closing and such failure continues for five business days after notice, an "Event of Default" will occur.
• **Loss of Voting and Disposition Rights**: Upon an Event of Default, the right to vote the pledged shares (65,199,658 Ordinary Shares) will transfer to the sellers, and Kaspi.kz will lose its right to vote these shares. The sellers will also gain the right to dispose of the pledged shares by way of foreclosure, private sale, or application of Turkish insolvency law to satisfy the outstanding obligation.
• **Maintenance of Pledge Percentage**: The number of pledged shares may increase in respect of any additional shares issued during the term of the Share Pledge in connection with any capital raising activities, transaction, share split, or other restructuring by the Issuer, to maintain the 20% pledge requirement.

Future Outlook

The document primarily details a completed acquisition and its terms. The only forward-looking aspect is the obligation for Kaspi.kz to pay the Deferred Cash Consideration of $526,911,567 no later than six months from the January 29, 2025 closing date.

Management Comments

• "The purpose of the Transaction is for the Reporting Person to acquire a controlling interest in the Ordinary Shares of the Issuer."
• "Except as set forth above, the Reporting Person has no present plan or proposal that relates to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D."

Industry Context

This acquisition signifies a strategic expansion for Kaspi.kz, a prominent fintech and "super app" operator in Kazakhstan, into the Turkish e-commerce market through D-MARKET Electronic Services & Trading. This move aligns with a broader trend of regional expansion by successful digital platforms seeking to leverage their business models in new, high-growth markets, particularly in emerging economies. It suggests Kaspi.kz's ambition to become a more significant player in the broader Eurasian digital economy.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess the acquisition against global benchmarks. Therefore, a detailed comparison to industry standards cannot be made based solely on the provided information.

Corporate Governance

Stakeholder Impact

• **Shareholders (Kaspi.kz)**: The acquisition represents a significant strategic expansion, potentially leading to long-term growth and diversification. However, it also introduces a substantial deferred payment obligation and associated pledge risk.
• **Shareholders (D-MARKET Electronic Services & Trading)**: Existing Class A and Class B shareholders have had their shares reclassified into Ordinary Shares, and the company now has a new controlling shareholder, which could lead to changes in strategy and operations. The sellers received a substantial cash payment.
• **Employees (D-MARKET Electronic Services & Trading)**: A change in controlling ownership often leads to operational and strategic shifts that could impact employees, though no specific details are provided in this filing.
• **Customers (D-MARKET Electronic Services & Trading)**: The acquisition by a "super app" developer like Kaspi.kz could lead to enhanced services, new features, or integration with Kaspi.kz's ecosystem, potentially benefiting customers.

Next Steps

• Kaspi.kz is obligated to pay the Deferred Cash Consideration of $526,911,567 to the sellers no later than six months from January 29, 2025.
• Integration of D-MARKET Electronic Services & Trading into Kaspi.kz's operations is implied following the acquisition of a controlling interest.

Key Dates

Keywords

Kaspi.kz, D-MARKET Electronic Services & Trading, acquisition, e-commerce, fintech, Turkey, Kazakhstan, controlling interest, Schedule 13D, share pledge, deferred payment, ordinary shares, corporate governance, strategic acquisition