Lesaka completes R1.6bn takeover of fintech operator Adumo
SA’s largest independent payments processor will hold 21% of Lesaka as part of the stock and cash deal
02 October 2024 - 19:01
by Mudiwa Gavaza
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Lesaka has completed its deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash.
Having received the green light from competition authorities in early September, the fintech group had been waiting for other conditions of the transactions to be met before closing it off.
The JSE- and Nasdaq-listed company, formerly Net1 UEPS Technologies, signed a definitive agreement to acquire Adumo for $85.9m (R1.59bn at the time) in May.
The purchase consideration will be settled through the combination of 17,279,803 new Lesaka shares to be issued to Adumo’s shareholders plus $12.5m in cash, funded by internal cash resources and external financing.
On Wednesday, the group said the final transaction was settled through the issuance of the Lesaka shares and a cash payment of R232.2m ($13.4m), implying a total purchase consideration of R1.67bn, or $96.2m, using the closing price of Lesaka shares on the JSE of R83.05 on October 1.
Lesaka provides informal retail merchants with point-of-sale devices with which they can pay their suppliers and sell products, including airtime and electricity. It has a primary listing on the Nasdaq and a secondary one on the JSE.
Adumo is SA’s largest independent payments processor and has been around for more than 20 years.
Lesaka’s latest acquisition will have the effect of shaking up the group’s shareholder register. Adumo’s ultimate shareholders include private equity player Apis Partners, African Rainbow Capital, Crossfin, the International Finance Corporation (IFC) and Adumo management.
Given the new shares issued as part of the sale, the Adumo consortium will hold 21% of Lesaka, making it an influential shareholder.
“The Adumo transaction is an exciting addition to the Lesaka story. It significantly enhances our technology platform, adding customers, solutions, and meaningful scale,” said Lincoln Mali, Lesaka CEO for Southern Africa.
He said the group’s fintech platform would now serve 1.7-million active consumers and 120,000 merchants and process more than R270bn in throughput per year. It had more than 3,300 employees in SA, Namibia, Botswana, Zambia and Kenya.
The group recently acquired Touchsides from Heineken SA for an undisclosed sum. That acquisition is expected to boost the group’s Kazang footprint in the tavern industry in SA’s informal market. Kazang is a payments platform that includes the buying and selling of airtime, as well as microlending.
This adds to the buyout of the Connect Group in April 2022 through a R3.7bn deal that is set to expand its footprint in the small, medium and micro enterprise sector in Southern Africa.
Lesaka recently reported that revenue increased 11% to R10.6bn for the year to end-June. Operating income increased to R67.3m compared with an operating loss of R275.3m a year ago. Its net loss improved 48% to R326.1m from a loss of R629.2m before.
The group said its merchant division’s revenue increased 12% to R9.3bn and segment adjusted earnings before interest, tax, depreciation and amortisation (ebitda) increased 4% to R624.1m. Its consumer division revenue increased 15% to R1.3bn and segment adjusted ebitda increased 361% to R274.2m.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Lesaka completes R1.6bn takeover of fintech operator Adumo
SA’s largest independent payments processor will hold 21% of Lesaka as part of the stock and cash deal
Lesaka has completed its deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash.
Having received the green light from competition authorities in early September, the fintech group had been waiting for other conditions of the transactions to be met before closing it off.
The JSE- and Nasdaq-listed company, formerly Net1 UEPS Technologies, signed a definitive agreement to acquire Adumo for $85.9m (R1.59bn at the time) in May.
The purchase consideration will be settled through the combination of 17,279,803 new Lesaka shares to be issued to Adumo’s shareholders plus $12.5m in cash, funded by internal cash resources and external financing.
On Wednesday, the group said the final transaction was settled through the issuance of the Lesaka shares and a cash payment of R232.2m ($13.4m), implying a total purchase consideration of R1.67bn, or $96.2m, using the closing price of Lesaka shares on the JSE of R83.05 on October 1.
Lesaka provides informal retail merchants with point-of-sale devices with which they can pay their suppliers and sell products, including airtime and electricity. It has a primary listing on the Nasdaq and a secondary one on the JSE.
Adumo is SA’s largest independent payments processor and has been around for more than 20 years.
Lesaka’s latest acquisition will have the effect of shaking up the group’s shareholder register. Adumo’s ultimate shareholders include private equity player Apis Partners, African Rainbow Capital, Crossfin, the International Finance Corporation (IFC) and Adumo management.
Given the new shares issued as part of the sale, the Adumo consortium will hold 21% of Lesaka, making it an influential shareholder.
“The Adumo transaction is an exciting addition to the Lesaka story. It significantly enhances our technology platform, adding customers, solutions, and meaningful scale,” said Lincoln Mali, Lesaka CEO for Southern Africa.
He said the group’s fintech platform would now serve 1.7-million active consumers and 120,000 merchants and process more than R270bn in throughput per year. It had more than 3,300 employees in SA, Namibia, Botswana, Zambia and Kenya.
The group recently acquired Touchsides from Heineken SA for an undisclosed sum. That acquisition is expected to boost the group’s Kazang footprint in the tavern industry in SA’s informal market. Kazang is a payments platform that includes the buying and selling of airtime, as well as microlending.
This adds to the buyout of the Connect Group in April 2022 through a R3.7bn deal that is set to expand its footprint in the small, medium and micro enterprise sector in Southern Africa.
Lesaka recently reported that revenue increased 11% to R10.6bn for the year to end-June. Operating income increased to R67.3m compared with an operating loss of R275.3m a year ago. Its net loss improved 48% to R326.1m from a loss of R629.2m before.
The group said its merchant division’s revenue increased 12% to R9.3bn and segment adjusted earnings before interest, tax, depreciation and amortisation (ebitda) increased 4% to R624.1m. Its consumer division revenue increased 15% to R1.3bn and segment adjusted ebitda increased 361% to R274.2m.
With Jacqueline Mackenzie
gavazam@businesslive.co.za
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