CPP Investments acquires 19.3% stake in Koba International (D1) for US $334M

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By CPE News

CPE News (7.7.2022) – Canada Pension Plan Investment Board (CPP Investments) has invested US $334 million for a 19.3% stake in Koba International Group S.A. (D1), the largest hard-discount retailer in Colombia, and the sixth largest food retailer in Colombia, with over 800 stores and 10 distribution centers.

The transaction marks CPP Investments first direct private equity investment in Colombia.

Financial terms were not disclosed. CPP Investments will join D1 controlling shareholder Capital Group Private Markets as a minority shareholder.

Capital Group Private Markets acquired its D1 stake in September 2016 from The Abraaj Group for an undisclosed amount. The Abraaj Group acquires D1 in January 2010.

photo credit: D1

News Release

CPP Investments Invests US$334 Million in Colombian Food Retailer D1

TORONTO, July 7, 2022 /CNW/ – Canada Pension Plan Investment Board (CPP Investments) today announced that it has invested US$334 million, for a 19.3% stake, in D1, the market leader in Latin America’s expanding “hard discount” food retail space, which focuses on offering selections of private-label products at affordable prices.

“Hard discounters” differ from traditional supermarkets by prioritizing convenience and low prices over size and assortment. This business model has proven highly successful in Colombia, where D1 has opened over 2,000 stores since its founding in 2009.

The transaction marks CPP Investments first direct private equity investment in Colombia, a market that is predicted by the OECD to grow by 6.1% in 2022 – more than double the global growth forecast.

“D1 provides an excellent opportunity to capitalize on the behavioral shift occurring in Latin America’s food retail space, where consumers are adopting new ways of shopping that prioritize convenience and price,” said Tania Chocolat, Head of Active Equities Latin America and São Paulo Office Head at CPP Investments.

D1 disrupted the food retail industry in Colombia, where it is leading a boom in the hard discount model. It is steadily opening more stores and introducing new products, which are known throughout Colombia for their high quality and low prices.

“Latin America is a region where several industries are undergoing rapid transformation and Colombia is among the markets we’ve identified as particularly fertile for growth,” added Chocolat. “Our investment in D1 supports our goal of identifying standout companies in the region that are well-positioned to deliver strong long-term, risk-adjusted returns for the CPP Fund.”

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the 21 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31 2022, the Fund totalled C$539 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedIn, Facebook or Twitter.

SOURCE Canada Pension Plan Investment Board

For further information: Asher Levine, Managing Director, Corporate Communications, T: +1 929 208 7939 alevine@cppib.com