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Lesaka buys payment platform Adumo for $85m

By , Africa editor
Africa , 08 May 2024
Lincoln Mali, CEO of Lesaka Southern Africa.
Lincoln Mali, CEO of Lesaka Southern Africa.

 Lesaka Technologies, a South African fintech firm, has inked a definitive deal to buy Adumo for $85.9 million (at the current rate of $1: R 18.50, as of May 7, 2024).

The company announced the transaction today, stating that it is subject to shareholder and regulatory clearance, and is scheduled to close in the third quarter of this year.

The purchase price will be paid in the form of 17,279,803 shares of Lesaka common stock issued to Adumo's current ultimate shareholders, as well as $12.5 million in cash, which will be funded by internal cash resources and external financing.

Adumo's ultimate shareholders include: Apis Growth firm I, a private equity firm managed by Apis Partners LLP (Apis); African Rainbow Capital (ARC), the largest shareholder in Crossfin Holdings;, the International Finance Corporation; and Adumo management.

After the acquisition, Lesaka says its ecosystem will serve 1.7 million active users, 119,000 merchants, and is expected to process over $13 billion (R250 billion) in annual throughput

The group will have around 3,300 employees in five countries: South Africa, Namibia, Botswana, Zambia, and Kenya.

A statement from Lesaka said that the acquisition strengthens its position "as natural consolidator of Southern African fintech and will enhance its strengths in both the consumer and merchant markets" and follows the successful merger of the Connect and Kazang companies, as well as the recent acquisition of Touchsides.

Adumo services roughly 23,000 active retailers. Its major businesses are card acquiring, integrated payments, and reconciliation services, which process more than $1.3 billion annually.

The company's corporate card services assist approximately 245,000 cardholders with payroll, incentives, rewards, and spending management.

Adumo ISV, commonly known as GAAP, is a major provider of POS and Software-as-a-Service solutions for the hospitality industry.

Lincoln Mali, CEO of Lesaka Southern Africa, said: "Adumo's customer base provides us access to more than 245,000 consumers and to payment technologies that we can incorporate into our existing operations."

Steve Heilbron, Lesaka's head of business development, added: "This is a historic transaction for us. We are delighted to welcome recognised shareholders Apis and ARC.”

Paul Kent, Adumo's co-founder and CEO, said: "Our combined offering will significantly enhance the customer value proposition, and it is a natural fit considering our respective strengths and technology offerings." 

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