Bradley Sacks, Capital Appreciation CEO.

South African fintech group Capital Appreciation (CTA) has concluded the acquisition of software firm Dariel for $7 million (R131.2) through a combination of cash and shares.

The company first announced the deal in April, saying it intended to 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.

Founded in 2001, Dariel is a South African IT services company that provides software, consulting, development, implementation and integration services.

It focuses on financial institutions and others in the financial services and fintech sectors.

Dariel client solutions include, among others, FX platforms, hospital administration systems, Know-your-client (KYC) and single-customer-view systems for some of South Africa’s foremost enterprises, as well as South Africa’s largest hotel management platform.

Dariel’s solutions are strongly cloud-based, with over 80% of its revenue related to the cloud in some form and more than 110 certifications in AWS and Azure to match.

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

The company said Dariel will now form part of Capital Appreciation’s Software division.

Capital Appreciation – led by CEO Bradley Sacks - said the 180 experienced staff from Dariel and the entrepreneurial management allows it to accelerate its participation in growth opportunities available to the fintech.

It said: “Substantial synergistic and collaboration opportunities also exist among the businesses, which the Group will begin to explore immediately following the conclusion of the acquisition.”

Michael Shapiro, executive director and head of the Capital Appreciation software division, commented: “Capital Appreciation is delighted to welcome the talented team from Dariel to our Software group as we join forces to innovate in the software development arena. 

"We share a passion for problem-solving and emerging technology, and we are confident that we will create significant value for our customers, employees, partners, investors and other stakeholders."

Malcolm Rabson, Gregory Vercellotti and Wayne Yan, the three founders of Dariel, will remain in the business and continue to steer the Dariel team.

“Being part of a listed company with a strong balance sheet will provide growth capital and the financial firepower to pursue much larger projects, as well as exciting opportunities to access international markets”, said the Dariel founders.

“It will also grant Dariel ready access to Capital Appreciation’s specialised cloud, AI, ML and expert UX/UI capabilities, opening the scope for continued innovation and expansion of Dariel’s products and services."