South African payments giant seals R507 million deal for prepaid business

The purchase consideration of R507 million comprises R332 million in cash and R175 million in shares of Lesaka common stock, to be settled in two tranches. 

Lesaka has also extended a R43 million loan to Recharger, which was exclusively used to repay an existing loan. 

Recharger is a South African prepaid electricity submetering and payments business with a base of over 460,000  registered prepaid electricity meters. 

Recharger enables landlords to collect payment in advance from tenants for utility usage, eliminating the need to manage billing and collections. 

This model further allows tenants to manage their utility usage and payments directly, giving them greater control over cost. 

Lesaka is a South African fintech company that operates across the continent, with a focus on underserviced consumers and merchants. Its payments offering is heavily focused on South Africa’s large and growing informal economy. 

It offers an integrated multiproduct platform that provides transactional accounts,  lending, insurance, payouts, card acquiring, cash management, software and Alternative Digital Payments (ADP). 

ADP includes our pre-paid solutions and supplier-enabled payments, which Recharger is expected to bolster following the acquisition.

Lesaka has a primary listing on NASDAQ and a secondary listing on the Johannesburg Stock  Exchange. 

The company has also begun moving into South Africa’s formal economy through its acquisition of Adumo in late 2024. 

It paid a heft R1.67 billion to buy the payment service in a combination of cash and Lesaka stock. 

This acquisition has resulted in Lesaka’s business now serving 1.7 million active consumers, and 120,000 merchants, processing over R270 billion in throughput.

Adumo was South Africa’s largest independent payments processor and operated across its home market, Namibia, Kenya, and Botswana. 

The company also owns GAAP, a leading provider of integrated point-of-sales software and hardware to the hospitality industry in Southern Africa, serving clients such as KFC, McDonald’s, Pizza Hut, Nando’s and Krispy Kreme. 

Lesaka’s financial performance has steadily improved in recent years, with the company swinging from an operating loss to an operating profit in the 2024 financial year. 

The company reported that its revenue increased by 11% to R10.6 billion. Its operating income turned around from a R275 million loss in 2023 to a profit of R67 million in 2024. 

While Lesaka still posted a net loss for the year, its loss improved by 48% to R326 million, compared to a net loss of R629 million in 2023.