Bradley Sacks, joint-CEO of Capital Appreciation.

Fintech group Capital Appreciation (CTA) is set to acquire software firm Dariel for $7.2 million, through a combination of cash and shares.

Dariel provides a variety of software engineering with a strong focus on financial institutions and others in the financial services and fintech sectors.

Capital Appreciation notified shareholders of the deal today in a notice on the Johannesburg Stock Exchange.

The company will acquire 100% of Dariel for an initial aggregate purchase consideration of R85.3 million to be settled by way of a cash payment of R46.9 million and the allotment out of treasury shares of 25,243,779 CTA shares, at R1. 52 per share, amounting to R38.4 million.

“CTA is pleased to announce that agreements have been concluded with Malcolm Rabson, Gregory Vercellotti and Wayne Yan, the founders and directors of Dariel Solutions Proprietary Limited (Dariel), to acquire 100% of Dariel for a total consideration of R131.2 million,” says the company

The acquisition of Dariel is subject to the fulfillment of certain suspensive conditions, which include approval by the Competition Commission.

CTA says the acquisition is consistent with its philosophy of investing in established, asset-light companies that deliver innovative and disruptive fintech solutions to mainly institutional clients.

It says: “Digital transformation, as well as an acceleration in demand for electronic payments, cloud services, and related solutions continue to support robust industry growth prospects over the medium term. Given Dariel’s participation in initiatives responsive to these trends, the acquisition offers CTA further growth potential, as well as further investment and acquisition opportunities to broaden CTA’s portfolio of services.”

Upon completion of the transaction, Dariel will form part of CTA’s software division.

Founded in 2001, Dariel is a South African IT software services provider involved in providing software, consulting, development, implementation and integration services, as well as maintenance and support to enterprises.