Media Coverage
EasyPay owner Lesaka launches R215m open staff ownership scheme, excludes top management
15 Nov 2024
By News24
ICT group Lesaka has launched an employee share ownership scheme that's open to all employees, with the exception of senior staff.
It says the scheme, which vests after seven years and amounts to 3% of its shares, will allow lower-level employees to participate in its success.
The growth-hungry digital financial services group says giving all employees a stake will help attract and retain talent.
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JSE-listed ICT group Lesaka Technologies, which is eyeing the digital fintech potential of SA's informal economy, has announced an inclusive employee ownership scheme it says will also help it attract and retain talent.
The Lesaka Employee Share Ownership Plan (ESOP) Trust will hold an effective 3% of Lesaka's issued shares at the date of implementation, representing approximately R215 million at the current market price of about R7.2 billion. The scheme is open to all current and future employees, regardless of race, though it excludes senior management.
Lesaka, 87% of whose employees fall within designated groups for empowerment purposes, was rebranded from Net1 UEPS in 2022 when it acquired Connect Group for R3.8 billion. This was a transformative acquisition aimed at helping it build a fintech platform that will offer financial services and payment processing to both consumers and merchants across the formal and informal sectors in southern Africa.
It offers transactional accounts (banking), insurance, lending and payments solutions for historically underserviced consumers, as well as micro-merchants and merchants. Its GAAP business is the biggest provider of point-of-sale technology to SA's hospitality industry.
It had also announced the acquisition of analytics and merchant services business Touchsides from Heineken, giving it a footprint in the tavern industry, which consists of an estimated 45 000 establishments. It said in its 2024 annual report that incurred about R1.8 million in acquisition-related expenditures, while the business contributed about a R3.6 million loss in the year.
It announced in September it had agreed to acquire Adumo for R1.59 billion in a cash-and-share deal that brought in Patrice Motsepe's African Rainbow Capital as an investor.
It said then that the combined entity will serve 1.7 million active consumers and 119 000 merchants, and process over R250 billion per annum. This means 3 300 employees operating in five countries in southern and eastern Africa, including Kenya.
The group added that its employee base is comprised of approximately 87% designated groups for BBBEE purposes.
"We are very proud of the launch of our broad-based employee share ownership plan," CEO Lincoln Mali said in a statement. "Lesaka has been on a far-reaching transformation journey and our employees becoming shareholders is a significant and an important milestone for us."
"One of the distinctive aspects of the Lesaka ESOP is our commitment to shared ownership with a broad range of our employees. At inception, all qualifying employees, regardless of seniority, salary, race, or gender, will receive equal benefits from the plan."
"We believe that this approach will ensure that our employees, from entry-level to management, have a meaningful opportunity to benefit from the company's growth and success in line with our values," he said.
Group executives and senior leadership will not participate in the plan, said Mali, who added:
We operate in a competitive market for talent and skills and the ability of employees at all levels to participate in value creation beyond just salaries and short-term bonuses will serve as an important contributor to our employee value propositions and our ability to attract and retain talent.
The vesting component of the ESOP scheme is seven years, at the end of which, there will be a liquidity event, referring to the ability to cash in on a share price rise, covering all existing beneficiaries.
This will be funded by the sale of Lesaka shares held by the trust post settlement of the notional vendor funding outstanding at the time, which refers to the money advanced in order to acquire the shares that have been distributed to the employees.
The group said this would directly linking the benefits employees receive to the company's long-term performance and growth.
The Lesaka ESOP Trust is structured as an evergreen trust, referring to the permanence of the plan, which allows for the inclusion of future employees after two years of service within the group.
Qualifying employees of the recent Touchsides and Adumo acquisitions will also be beneficiaries of the Lesaka ESOP Trust, the shares of which are expected to be issued at the end of January.