SOUTH AFRICA – Lesaka Technologies, a fintech firm based in South Africa, has signed a definitive agreement to acquire fellow South Africa-based paytech Adumo in a deal worth around US$85.9 million.

The deal, still subject to shareholder and regulatory approvals, will be settled through a combination of US$12.5 million in cash and the issuance of 17,279,803 shares of Lesaka common stock to Adumo’s current shareholders. 

Both external financing and internal cash resources will fund this cash component.

We are thrilled to welcome the Adumo team into the Group and Adumo CEO Paul Kent onto our executive leadership team,” said Lincoln Mali, CEO of Lesaka Southern Africa.

“Adumo’s customer base provides us access to more than 245,000 consumers and payment technologies that we can incorporate into our existing operations. 

“The pending acquisition of Adumo is another significant milestone for Lesaka as we build the top fintech platform in Southern Africa.” 

Adumo’s shareholders comprise Apis Growth Fund I, a private equity fund overseen by UK-based VC Apis Partners, and African Rainbow Capital (ARC), a South African investment firm.

Founded in 2009 and headquartered in Bryanston, South Africa, Adumo is considered the largest point-of-sale (POS) and Software-as-a-Service (SaaS) solutions provider to the country’s hospitality industry.

The paytech primarily specializes in integrated payments, reconciliation services, and card acquiring, serving approximately 23,000 merchants. Its corporate card offering is utilised by over 245,000 cardholders and supports expense management, rewards, incentives, and payroll.

Adumo co-founder and chief executive Paul Kent said he was looking forward to joining the Lesaka team and “contributing to the continued success of the Lesaka story.” 

“Our combined offering will significantly enhance the customer value proposition, and it is a natural fit considering our respective strengths and technology offerings,” he said.

Lesaka, which provides B2B and B2C financial services to South African consumers and enterprises, says the acquisition will reinforce the company’s position as a natural consolidator of Southern African fintech and enhance its strengths in the consumer and merchant markets.

Following the acquisition, Lesaka anticipates that its solutions ecosystem will serve more than 119,000 merchants and 1.7 million consumers, processing over US$13 billion in throughput annually. 

Additionally, the group plans to extend its operations to encompass Kenya, Botswana, Namibia, and Zambia, alongside its initial market of South Africa, with a combined workforce exceeding 3,300 employees.

Lesaka says the deal will be finalized in the “third calendar quarter of 2024”.

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