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    HomeEcosystem NewsLesaka Acquires South African Leading Payment Platform Adumo, Welcomes New Investors Apis...

    Lesaka Acquires South African Leading Payment Platform Adumo, Welcomes New Investors Apis and ARC

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    Lesaka Technologies, Inc., a company registered in the state of Florida, USA, listed on Nasdaq (LSAK) and the Johannesburg Stock Exchange (LSK), has recently announced its definitive agreement to acquire Adumo RF (Pty) Ltd (“Adumo”), a prominent player in the payment platform sector. The acquisition, valued at ZAR 1.59 billion (approximately $85.9 million), is poised to reshape the landscape of financial technology in Southern Africa. This move will be accompanied by the introduction of new shareholders, Apis and African Rainbow Capital (ARC).

    The agreement, subject to shareholder and regulatory approvals, entails a combination of stock issuance and cash settlement. Lesaka will issue 17,279,803 shares of its common stock to Adumo ’s current ultimate shareholders, in addition to a cash payment of ZAR 232 million ($12.5 million). The financing for this transaction will be drawn from internal cash resources as well as external sources.

    Adumo’s shareholder base includes notable entities such as Apis Growth Fund I, managed by Apis Partners LLP, African Rainbow Capital (ARC), a major stakeholder in Crossfin Holdings (RF) Pty Ltd, the International Finance Corporation, and Adumo management. This diverse mix of stakeholders underscores the significance of the deal within the financial ecosystem.

    Post-acquisition, Lesaka’s operational footprint will encompass 1.7 million active consumers and 119,000 merchants, with an annual throughput exceeding ZAR 250 billion. The company will operate across five countries in Southern Africa, boasting a workforce of over 3,300 employees. This consolidation reinforces Lesaka’s position as a leading fintech player in the region, building upon its previous successes in integrating businesses like Connect, Kazang, and Touchsides.

    Founded in 2009 by Paul Kent, Adumo, with approximately 23,000 active merchants, specializes in card acquiring, integrated payments, and reconciliation services, processing over ZAR 24 billion ($1.3 billion) in throughput annually. Its corporate card services cater to a substantial user base of over 245,000 cardholders, facilitating payroll, incentives, rewards, and expense management. Additionally, Adumo’s ISV arm, known as GAAP, dominates the hospitality sector in Southern Africa, providing POS and Software-as-a-Service solutions.

    Commenting on the acquisition, Lincoln Mali, CEO of Lesaka Southern Africa, expressed enthusiasm about the prospects of integrating Adumo’s offerings into Lesaka’s existing operations. He highlighted the access to new technologies and expanded consumer base as key benefits of the deal. Steve Heilbron, Head of Corporate Development at Lesaka, emphasized the strategic importance of the acquisition in broadening the company’s product portfolio and addressing merchant needs effectively.

    Paul Kent, CEO of Adumo, conveyed optimism about the partnership, foreseeing enhanced value propositions for customers. Dean Sparrow, CEO of Crossfin, a pivotal figure in Adumo’s growth journey, lauded the deal as a logical evolution for the business, benefiting customers and staff alike.

    Matteo Stefanel and Udayan Goyal, Co-Founders and Managing Partners of Apis Partners, expressed their satisfaction with the partnership, anticipating continued success for the business under Lesaka’s stewardship.

    The transaction, slated for closure in the third calendar quarter of 2024, remains contingent upon shareholder and regulatory approvals, along with the fulfillment of customary closing conditions. Based on the volume-weighted average price per Lesaka share over the past three and six months, the deal represents a premium of 11% and 16% respectively, underscoring its favorable terms.

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