Lesaka Acquires South African Fintech Firm Adumo in $85.9 Million Deal

South African fintech company Lesaka Technologies has made a significant move by acquiring Adumo RF (Pty) Ltd in a deal valued at ZAR 1.59 billion (approximately USD 85.9 million). The acquisition is subject to shareholder and regulatory approvals.

Here are the key details of the deal:

1. Purchase Consideration:
   • Lesaka will settle the acquisition price through a combination of methods:
     • Issuing 17,279,803 shares of Lesaka common stock to Adumo’s current ultimate shareholders.
     • Providing ZAR 232 million (USD 12.5 million) in cash, funded by internal resources and external financing.
   • Adumo’s ultimate shareholders include:
     • Apis Growth Fund I, a private equity fund managed by Apis Partners LLP.
     • African Rainbow Capital (ARC), the largest shareholder of Crossfin Holdings (RF) Pty Ltd.
     • International Finance Corporation (IFC) and Adumo management.
2. Impact on Lesaka’s Ecosystem:
   • After the acquisition, Lesaka’s ecosystem will serve:
     • 1.7 million active consumers.
     • 119,000 merchants.
     • Process over ZAR 250 billion in throughput annually (including ZAR 40 billion card transactions, ZAR 100 billion value-added services, and ZAR 110 billion cash transactions).
   • Lesaka will operate in five countries: South Africa, Namibia, Botswana, Zambia, and Kenya, with a total of over 3,300 employees.
3. Adumo’s Operations:
   • Adumo serves approximately 23,000 active merchants.
   • Its primary operations include:
     • Card acquiring.
     • Integrated payments.
     • Reconciliation services (processing more than ZAR 24 billion annually).
   • Adumo also provides corporate card services to over 245,000 cardholders, supporting payroll, incentives, rewards, and expense management.
   • Adumo’s ISV (GAAP) is the largest POS and Software-as-a-Service solutions provider to the hospitality sector in Southern Africa.
4. Lesaka’s Position:
   • The acquisition reinforces Lesaka’s position as a natural consolidator of Southern African Fintech.
   • It enhances Lesaka’s strengths in both the consumer and merchant markets.
   • This move follows the successful integration of the Connect and Kazang businesses and the recent acquisition of Touchsides.

In summary, Lesaka’s strategic acquisition of Adumo positions it as a major player in the Southern African fintech landscape, with expanded capabilities and a broader reach.