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Picture: 123RF/EVERYTHING POSSIBLE
Picture: 123RF/EVERYTHING POSSIBLE

Fintech group Capital Appreciation (Capprec) has concluded the buyout of local software engineering and development company Dariel Solutions for R131.2m. This, as the group looks to invest in established companies that deliver innovative and disruptive solutions to mainly institutional clients.

Dariel, founded in 2001, is the holding company of Dariel Software, which has clients in fintech, banking and insurance, healthcare, telecommunications, hospitality, mining and manufacturing.

The deal, first announced in April, will be settled by a combination of cash and ordinary shares after an agreement was reached with Dariel’s founders — Malcolm Rabson, Gregory Vercellotti and Wayne Yan — and its directors.

Capprec’s business includes selling payment terminals such as point-of-sale devices and debit and credit card machines.

It also provides the back-end systems that allow these devices to accept payments and the technology that banks and other financial services companies use to add more features to their digital platforms, including loyalty programmes and prepaid vouchers. Capitec, Nedbank and Old Mutual are among its customers.

Dariel now becomes part of Capprec’s software division, with its founder set to remain in the business.

Its solutions include foreign exchange platforms, hospital administration systems, know-your-client (KYC) and single-customer-view systems, as well as SA’s largest hotel management platform. The company's systems are largely cloud-based, with over 80% of its revenue related to cloud computing. 

In a statement, Michael Shapiro, executive director and head of Capital Appreciation’s software division said: “Collectively, we share a passion for problem-solving and emerging technology, and we are confident that we will create significant value for our customers, employees, partners, investors and other stakeholders”. 

In terms of the deal, Capprec will first pay R46.9m in cash and distribute 25.24-million shares at R1.52 apiece, amounting to R38.4m.

At the end of March 2022, the value of Dariel’s net assets were R39.2m, rising to R47.8m a year later.

Dariel’s core earnings (ebitda) and profit after tax at the end of March were R23.8m and R16.2m, respectively.

Capprec is no stranger to acquisitions since listing as a special-purpose acquisition company (Spac) on the JSE and raising R1bn through a private placement of shares in late 2015.

Since then, it has acquired 100% of African Resonance, Dashpay and Synthesis Software Technologies, as well as a 17.45% interest in Resonance Australia. It also has a 35% stake in government messaging platform GovChat.

During its most recent financial year, the company acquired 100% of Responsive Technology group and Responsive Digital, as well as 71% of Rethink Digital Solutions. Responsive Digital designs and develops digital applications for clients in SA, the US, Europe and the UK.

gavazam@businesslive.co.za

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