South African fintech Lesaka completes Adumo’s acquisition for $96 million

The news: 

• Lesaka Technologies, a NASDAQ- and Johannesburg Stock Exchange-listed fintech, has officially finalised its acquisition of payment processing firm Adumo for a total consideration of R1.67 billion ($96 million).
• The deal involves issuing approximately 17 million shares of Lesaka common stock and a cash payment of R232.2 million ($13 million).
• The final acquisition amount is $10 million higher than the figure reported in May 2024, reflecting a 27% increase in Lesaka’s share price.

Lincoln Mali, CEO of Lesaka Technologies Southern Africa, expressed enthusiasm about the acquisition, stating, “The Adumo transaction is an exciting addition to the Lesaka story. It significantly enhances our technology platform, adding customers, solutions, and meaningful scale.” 

He also warmly welcomed Adumo employees and its CEO, Paul Kent, who will join Lesaka’s executive leadership team and oversee the merchant division. 

Kent will oversee Lesaka’s merchant division, which the group expects to grow now that the interest rate-cutting cycle has begun. Dean Sparrow, CEO of Crossfin Technology Holdings, also joins the Lesaka board as a non-executive director.

The acquisition received the green light from Lesaka shareholders and South Africa’s Competition Commission in September 2024. It significantly boosts Lesaka’s operational scale, enabling the fintech platform to serve 1.7 million active consumers and 120,000 merchants, processing over R270 billion ($15.5 million) in transactions annually. 

With the merger, Lesaka now employs over 3,300 staff across South Africa, Namibia, Botswana, Zambia, and Kenya.

Founded in 2019, Cape Town-based Adumo specialises in card-acquiring point-of-sale (POS) devices and integrated payment solutions, servicing 23,000 merchants and 240,000 consumers. 

Before the acquisition, Adumo claimed it was processing over R24 billion ($1.3 billion) in transactions annually, further solidifying its position in the market.

Lesaka, which has a market capitalisation of $310 million, is also known for its ownership of payment provider EasyPay and another card-acquiring POS device company, Kazang. In February 2024, the fintech company acquired Touchsides, a data analytics and merchant services company, from Heineken, a beverage manufacturer, for an undisclosed amount.

Following this acquisition, Lesaka is eyeing further growth opportunities and has identified several potential acquisition targets.

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Despite reporting an 11% increase in revenue to R10.6 billion ($609 million) for the financial year ending June 2024, Lesaka posted a net loss of R326 million ($18.7 million). 

However, the integration of Adumo is anticipated to bolster Lesaka’s competitive edge against rivals like YOCO, which operates solely within South Africa.

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