Lesaka Holdings Limited, a leading Southern African fintech company, has further solidified its position as a natural consolidator in the region through the acquisition of Adumo.

Adumo, South Africa’s largest independent payments processor with over two decades of experience, brings a wealth of expertise and a strong customer base to Lesaka.

This acquisition reinforces Lesaka’s strengths in both consumer and merchant markets, following the successful integration of Connect and Kazang and the recent acquisition of Touchsides.

The acquisition was settled through the issuance of 17,279,803 shares of Lesaka’s common stock and a cash payment of ZAR 232.2 million ($13.4 million). This translates to a total purchase consideration of ZAR 1.67 billion ($96.2 million).

This strategic acquisition strengthens Lesaka’s position in the region, allowing it to serve an even larger customer base. The combined entity will now cater to 1.7 million active consumers and 120,000 merchants across five countries: South Africa, Namibia, Botswana, Zambia, and Kenya.

With an anticipated annual throughput exceeding ZAR 270 billion ($15.6 billion), the merged company is positioned to become a dominant force in the Southern African payments market.

Kenyan Banking Landscape to Change with Access Bank Acquisition

Partnerships and Growth Opportunities

Lesaka aims to leverage Adumo’s extensive experience in payment processing to accelerate its digital transformation efforts. By combining their strengths, the companies can offer a more comprehensive suite of financial services to their customers.

This includes the potential for cross-selling products, expanding into new markets, and developing innovative payment solutions.

Key Executives Join Forces

As part of the acquisition, Paul Kent, the CEO of Adumo, joins Lesaka’s executive team. His expertise in the payments industry will be invaluable in driving the company’s growth and strategic direction.

Additionally, Dean Sparrow, CEO of Crossfin, joins the board as a non-executive director, bringing his wealth of industry knowledge to the enlarged group.

About Adumo

Adumo is a renowned provider of integrated payment solutions, serving approximately 23,000 active merchants across Southern Africa. With its operations in South Africa, Namibia, Botswana, and Kenya, Adumo offers a comprehensive range of payment processing and software solutions tailored to businesses of all sizes.

Adumo’s Business Segments

Adumo operates across three distinct business segments:

Adumo Payments: Provides payment processing, integrated payments, and reconciliation solutions to small and medium-sized enterprises (SMEs) in South Africa, Namibia, and Botswana. It also offers card issuing program management to corporate clients.
Adumo ISV (GAAP): A leading provider of integrated point-of-sales software and hardware to the hospitality industry in Southern Africa, serving renowned brands like KFC, McDonald’s, Pizza Hut, Nando’s, and Krispy Kreme.
Adumo Ventures: Offers online commerce solutions, cloud-based point-of-sale solutions, and an aggregated payment and credit platform to SMEs and corporate clients.

Adumo’s Contribution:

Adumo brings a wealth of expertise and experience in the fintech space. Their revenue model, primarily based on per-transaction fees and software-as-a-service (SaaS) subscriptions, has enabled them to reach a significant customer base.

With approximately 950 employees across Southern Africa as of June 30th, 2024, Adumo possesses a strong human resource infrastructure to support its operations.

Lesaka’s Vision:

Lesaka’s mission is to bridge the financial inclusion gap in Southern Africa by offering a comprehensive suite of financial services for both individuals and businesses.

Their extensive portfolio includes transactional accounts, lending products, insurance solutions, cash management tools, card acceptance options, supplier payment services, software solutions, and bill payment functionalities.

By developing a connected ecosystem with a full-service fintech platform, Lesaka aims to be a pivotal player in the digital transformation of commerce within the region.

Xero Expands in Africa with Syft Acquisition

What this Means for the Future:

The acquisition of Adumo represents a significant step forward for Lesaka in achieving its vision. Combining Adumo’s expertise in transaction processing and SaaS solutions with Lesaka’s broader financial services offerings will create a more robust and comprehensive platform for consumers and merchants across Southern Africa.

This strategic move is expected to:

Expand Reach: Leverage Adumo’s existing customer base to expand Lesaka’s footprint in the region.
Enhanced Service Offerings: Combine Adumo’s strengths with Lesaka’s wider portfolio to create a one-stop shop for financial needs.
Increased Financial Inclusion: Facilitate broader access to essential financial services for underserved populations in Southern Africa.

By leveraging the combined resources of both companies, Lesaka is positioned to become a leading force in driving financial inclusion and digital commerce advancement in Southern Africa.

The future promises an exciting journey for both companies as they work towards empowering individuals and businesses through innovative financial technology solutions.