Dual-listed fintech firm Lesaka Technologies has signed a definitive agreement to acquire payments services provider Adumo in a R1.59 billion ($85.9 million) deal.
Formerly known as Net1 UEPS Technologies, Lesaka is listed on the Johannesburg Stock Exchange and the Nasdaq.
The R1.59 billion Adumo transaction is expected to close in the third calendar quarter of 2024 and is subject to shareholder and regulatory approvals and satisfaction of customary closing conditions.
Adumo’s shareholders include Apis Growth Fund I, a private equity fund managed by Apis Partner; African Rainbow Capital (ARC), the largest shareholder of Crossfin Holdings; as well as the International Finance Corporation; and Adumo management.
It serves approximately 23 000 active merchants, and the firm’s primary operations include card acquiring, integrated payments and reconciliation services processing more than R24 billion ($1.3 billion) in throughput per year.
Lesaka points out that Adumo’s corporate card services cover over 245 000 card-holders supporting payroll, incentives, rewards and expense management.
Adumo ISV, also known as GAAP, is the largest point-of-sale and software-as-a-service solutions provider to the hospitality sector in Southern Africa, it adds.
According to Lesaka, the purchase consideration will be settled through the combination of an issuance of 17 279 803 shares of Lesaka common stock to Adumo’s current ultimate shareholders, plus R232 million ($12.5 million) in cash, funded by internal cash resources and external financing.
After giving effect to the acquisition, Lesaka’s ecosystem will serve 1.7 million active consumers, 119 000 merchants, and process over R250 billion in throughput (R40 billion card, R100 billion value-added services and R110 billion cash) per year, says the company.
The group will have over 3 300 employees operating on the ground in five countries – South Africa, Namibia, Botswana, Zambia and Kenya.
“The acquisition reinforces Lesaka’s position as natural consolidator of Southern African fintech and will enhance our strengths in the consumer and merchant markets, and follows the successful integration of the Connect and Kazang businesses and the recent acquisition of Touchsides,” the dual-listed company notes.
Lincoln Mali, CEO of Lesaka Southern Africa, says: “We are thrilled to welcome the Adumo team into the group and Adumo CEO Paul Kent onto our executive leadership team.
“Adumo’s customer base provides us access to more than 245 000 consumers and to payment technologies that we can incorporate into our existing operations. The pending acquisition of Adumo is another significant milestone for Lesaka, as we build the top fintech platform in Southern Africa.”
Steve Heilbron, head of corporate development at Lesaka, adds that this is a landmark deal for the fintech group.
“We are excited to welcome respected shareholders Apis and ARC. The augmentation of product offerings broadens our value proposition and enhances our ability to be disruptive and solve our merchants’ pain points.”
Adumo co-founder and chief executive Paul Kent comments: “We look forward to joining forces with the Lesaka team and contributing to the continued success of the Lesaka story. Our combined offering will significantly enhance the customer value proposition, and it is a natural fit considering our respective strengths and technology offerings.”
Dean Sparrow, chief executive of Crossfin, which was instrumental in the initial formation and growth of Adumo since 2017, says: “We are very pleased to have found an exceptional home for the Adumo Group and see this next step in Adumo’s growth journey as an incredibly exciting and logical evolution for the business, its customers and staff alike.”
Matteo Stefanel and Udayan Goyal, co-founders and managing partners of Apis Partners, say: “Apis has enjoyed a successful partnership with Adumo over the past few years, supporting the company with significant capital raises and co-ordinating key acquisitions. We look forward to being part of the exciting new chapter with Lesaka, which we expect will bring continued success to the business.”
Share