Media Coverage
Lesaka buys prepaid electricity metering and payments business
20 Nov 2024
By Mudiwa Gavaza | BusinessDay
The acquisition of Lesaka Technologies is the latest in a string of deals the group has finalised
Lesaka Technologies remains true to its strategy of acquisitive growth with the conclusion of a deal to buy 100% of prepaid electricity metering and payments business Recharger for R507m.
Recharger is a local prepaid electricity submetering and payments business with a base of more than 460,000 registered prepaid electricity meters.
The transaction marks the Nasdaq- and JSE-listed fintech group’s entry into the SA private utilities space while boosting its alternative payments business.
Lesaka, formerly Net1 UEPS, said the acquisition price would be paid over two tranches with the first tranche settled at closing and the second tranche a year later.
The purchase would be settled through a combination of R332m ($18m) in cash and R175m ($10m) in Lesaka stock.
The platform enables landlords to collect payment for utilities from tenants in advance, eliminating the need to manage billing and collections. This gives tenants the ability to manage their utility usage and payments directly, rather than the typical route through a landlord, providing them with greater control over costs.
Once the transaction is completed, Recharger will be absorbed into Lesaka’s merchant division, the group’s current money spinner, within the enterprise unit.
The share price applied to determine the number of shares of common stock units to be issued will be based on the volume-weighted average price of Lesaka shares for the three-month period before the disbursal of each tranche.
Lesaka will also make a R43m contribution to Recharger at deal close, which will be used exclusively to repay a loan due by Recharger to its current owners.
This is the latest in a string of deals that the group has orchestrated.
In October, the group completed a deal to buy local fintech operator Adumo for R1.6bn through a combination of stock and cash. The unit was SA’s largest independent payments processor and has been around for more than 20 years.
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, and microlending.
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 SMME sector in Southern Africa.
Lesaka provides informal retail merchants with point-of-sale devices with which they can pay their suppliers and sell products, including airtime and electricity.
The transaction is expected to close in the third quarter of Lesaka’s 2025 fiscal year and is subject to regulatory approvals and satisfaction of customary closing conditions.