Wirecard acquires South African MyGate
Wirecard AG has acquired 100% of Cape Town based MyGate Communications.
The German company is a software and IT specialist for outsourcing and white label solutions for payment processing and issuing products, while MyGate enables merchants to accept a wide range of different e-commerce payment options, in particular online card payments, enabling the companies to serve African consumers. It has been named one of the leading payment service providers (PSPs) in Africa. The company is said to be operating one of Africa' fastest-growing online payment gateways and was recently voted the best online payment gateway in Africa in 2016 by 2016 Technology Innovator Awards.
The parties agreed upon a purchase price of EUR23.1 million, consisting of an upfront payment of EUR18.2 million and earn out payments of up to EUR4.9 million. MyGate is furthermore expected to generate earnings before interest, tax, depreciation and amortisation (EBITDA) of EUR2.0 million for the complete calendar year 2017.
The local company says it has been on the market for the right payment partner that could help accelerate its strategy across Africa and the timing of Wirecard offer afforded them the opportunity.
A recent survey by digital payments company PayPal, indicated that although e-commerce has experienced a slow take-off in SA, it is now gathering pace. The PayPal report says 58% of online adults in SA shopped online over the past 12 months, amounting to an estimated total spend of R37.1 billion.
Wirecard says the acquired PSP business along with its integration into Africa's leading acquiring banks and the Visa network offers enormous value added for them. "Wirecard's regional product portfolio and supplements the existing product portfolio offered by our subsidiary Wirecard South Africa. This merger speeds up our expansion into Africa's international markets and offers further potential to leverage synergies. In future, African merchants will receive a comprehensive payment solution along the entire value-added chain from a single source. Our IP-based payment and risk management technology will benefit from the acquired business, which, in turn, is expected to be expanded with additional value-added services."
Earlier this year MyGate partnered with Callpay, a provider of secure payment solutions, to provide a payment solution that offers secure, telephonic payments in SA.