South African fintech company Adumo has been acquired by counterpart Lesaka in a deal worth ZAR1.59 billion (US$85.9 million), subject to shareholder and regulatory approval.
Adumo is South Africa’s largest independent payments processor, assisting approximately 23,000 active merchants with operations such as card acquiring, integrated payments and reconciliation services Since raising US$15 million in funding from IFC in 2021, it has been on somewhat of an acquisitions spree, buying the likes of SwitchPay, WireCard, GAAP, SureSwipe, iKhokha, and other smaller payment companies.
It has now been acquired itself, by Lesaka, a South African fintech company that utilises its proprietary banking and payment technologies to deliver superior financial services solutions to merchants and consumers in Southern Africa.
The acquisition price is ZAR1.59 billion (US$85.9 million), which will be settled through the combination of an issuance of 17,279,803 shares of Lesaka common stock to Adumo’s current ultimate shareholders, plus ZAR 232 million (US$12.5 million) in cash. Adumo’s ultimate shareholders include Apis Growth Fund I, a private equity fund managed by Apis Partners LLP; African Rainbow Capital, the largest shareholder of Crossfin Holdings; as well as IFC and Adumo management.
Adumo’s primary operations include card acquiring, integrated payments and reconciliation services, and it serves around 23,000 active merchants, processing more than ZAR24 billion (US$1.3 billion) in throughput per year. The company’s corporate card services cover over 245,000 card holders supporting payroll, incentives, rewards, and expense management. Adumo ISV, also known as GAAP, is the largest POS and Software-as-a-Service solutions provider to the hospitality sector in Southern Africa.
After giving effect to the acquisition, Lesaka’s ecosystem will now serve 1.7 million active consumers, 119,000 merchants, and process over ZAR250 billion in throughput per year. The group will have over 3,300 employees operating on the ground in five countries – South Africa, Namibia, Botswana, Zambia, and Kenya. The company said the acquisition reinforced its position as the “natural consolidator” of Southern African fintech, and would enhance its strengths in both the consumer and merchant markets.
“We are thrilled to welcome the Adumo team into the Group and Adumo CEO Paul Kent onto our executive leadership team. 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. The pending acquisition of Adumo is another significant milestone for Lesaka as we build the top fintech platform in Southern Africa,” said Lincoln Mali, CEO of Lesaka Southern Africa.
Adumo co-founder and chief executive Paul Kent said he was looking forward to joining forces with 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.
