The International Finance Corporation (IFC), which is a member of the World Bank Group, has agreed to buy 18% of Net 1 UEPS Technologies for $107.7 million (R1.6 billion).
The IFC, along with certain funds managed by IFC Asset Management Company, will subscribe for almost 10 million shares of Net 1's stock at a subscription price of $10.79 per share (around R158). This is a 20% premium over the company's closing share price on the Nasdaq on 8 April.
The Nasdaq- and JSE-listed company says it will use the proceeds of the IFC investment primarily for the expansion of its business and technological solution in emerging markets across the globe.
Chairman and CEO of Net 1, Serge Belamant, says the IFC equity investment represents a landmark moment for the company.
"We are honoured IFC has selected Net 1 for its largest investment ever in the financial technology sector. IFC's investment recognises the achievements, disruptive technologies and business model of the company and its employees.
"We are completely aligned with IFC through our shared vision of providing financial inclusion to the billions of unbanked and under-banked citizens of the world and we look forward to the opportunities presented by IFC's expansive global network and expertise," he says.
IFC is a member of the World Bank Group and is the largest global development institution focused on the private sector in emerging markets.
IFC has been investing in disruptive technologies around the world to help expand access to financial services, and as of March 2016 had invested approximately $180 million in 26 financial technology companies around the world, servicing over 220 million people.
"Net 1 has created impressive propriety technology for the delivery of services and demonstrated its effectiveness in South Africa," says Atul Mehta, IFC director of telecoms, media and technology.
"IFC and IFC AMC's funds' investments will help Net 1 expand regionally, especially into African countries where there is limited banking infrastructure and availability of financial services for the poorest segments of the population."
Net 1 says the closing of the investment is expected by the end of this month. IFC will also have the right to nominate an independent director to the Net 1 board.
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