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Greenlight for Lesaka’s R1.6bn Adumo Takeover.

03 Sept 2024

by MUDIWA GAVAZA | BL PREMIUM

Competition Tribunal Greenlights Lesaka for Adumo Takeover

The Competition Tribunal has approved Lesaka’s deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash. 

On Tuesday, the tribunal, which has the final say on competition matters in the country, said it had “unconditionally approved the merger”. This means the JSE-listed fintech group will not have to make any concessions to make the acquisition final.

Last month, the Competition Commission — which investigates local market structures — recommended the tribunal approve the deal. 

Lesaka had 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.

Adumo’s ultimate shareholders include private equity player Apis Partners, African Rainbow Capital — the largest shareholder of Crossfin, the International Finance Corporation (IFC) and Adumo management.

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, with a market cap of R5bn on the JSE, said the acquisition reinforced its position as a “natural consolidator of Southern African fintech and will enhance our strengths in both the consumer and merchant markets”.

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 micro-lending. 

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 said that once the Adumo transaction was complete its ecosystem would serve 1.7-million active consumers and 119,000 merchants. Additionally, the group would have more than 3,300 employees operating in five countries: SA, Namibia, Botswana, Zambia and Kenya.

gavazam@businesslive.co.za

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