Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today announced
that it has signed a definitive agreement to acquire 100% of
Touchsides (Pty) Ltd (“Touchsides”), a leading data analytics and,
insights and merchant services company, from Heineken International
B.V. The Touchsides and Kazang businesses are highly complementary,
and the acquisition is expected to significantly expand Kazang’s
footprint in the tavern industry in South Africa’s informal market.
Touchsides has an active base of over 10,000 POS
terminals across South Africa’s informal licensed taverns, and
processes more than 1.5 million transactions per day. The business
provides platform-as-a-service (PaaS) and software-as-a-service
(SaaS) solutions to licensed tavern outlets, enabling the
measurement of sales activity in real-time, management of stock
levels and informing commercial decisions, such as pricing and
promotional offers. The data and insights gathered from these
terminals carries significant value and potential to be monetized
through relationships with a range of clients including fast-moving
consumer goods companies, retailers, wholesalers, route-to-market
suppliers, and financiers.
The licensed tavern market in South Africa
consists of an estimated 45,000 establishments, is a major vertical
in South Africa’s informal market and provides a real growth
opportunity for Kazang.
Lesaka head of Merchant Division and CEO
of Connect Steve Heilbron said: "Touchsides is an exciting
acquisition target and aligns perfectly with our strategy of adding
scale and broadening our service offering in our Merchant division.
With its installed network and deep data and insight capabilities,
we expect to have a strong platform to better understand and
further penetrate South Africa’s informal markets."
"We have identified multiple growth levers from
this acquisition that we are ready to execute on," added
Heilbron. "Operating as an independent company
unaffiliated to a major beverage supplier, we see a distinct
opportunity to significantly grow Touchsides' tavern base and to
monetize its real-time data. Additionally, we see opportunities for
Kazang not only in providing services to Touchsides base, but also
in leveraging its data monetization experience and point-of-sale
expertise across our large informal merchant base outside of the
tavern industry."
The acquisition, funded by internal cash
generation of the Group, is expected to close in March 2024 and is
subject to satisfaction of customary closing conditions. As part of
the acquisition, Heineken’s operating business in South Africa has
agreed to a long-term renewable contract with Touchsides for access
to Touchsides’ tavern data and services.
About Lesaka
(www.lesakatech.com)
Lesaka Technologies, (Lesaka™) is a South
African Fintech company that utilizes its proprietary banking and
payment technologies to deliver superior financial services
solutions to merchants (B2B) and consumers (B2C) in Southern
Africa. Lesaka’s mission is to drive true financial inclusion for
both merchant and consumer markets through offering affordable
financial services to previously underserved sectors of the
economy. Lesaka offers cash management solutions, growth capital,
card acquiring, bill payment technologies and value-added services
to formal and informal retail merchants as well as banking,
lending, and insurance solutions to consumers across Southern
Africa. The Lesaka journey originally began as “Net1” in 1997 and
later rebranded to Lesaka (2022), with the acquisition of Connect.
As Lesaka, the business continues to grow its systems and
capabilities to deliver meaningful fintech-enabled, innovative
solutions for South Africa’s merchant and consumer markets.
Lesaka has a primary listing on NASDAQ
(NasdaqGS: LSAK) and a secondary listing on the Johannesburg Stock
Exchange (JSE: LSK). Visit www.lesakatech.com for additional
information about Lesaka Technologies (Lesaka ™).
About Kazang
(www.kazang.com)
Kazang is a leading provider of cash and digital
solutions to merchants in Southern Africa’s informal economies. Its
fintech solutions include a wide range of value-added services
(VAS), card acquiring, secure cash vaults and supplier payments
platforms. Kazang operates a network of over 75,000 active devices,
and processes around 2.2 million transactions daily.
Kazang is dedicated to helping small and medium
merchants grow and succeed, through increasing their sales, making
their businesses more efficient and reducing their risks with its
holistic portfolio of products and services.
Forward-Looking Statements
This press release contains certain statements
that may be considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and such statements are subject to the safe harbor created by those
sections and the Private Securities Litigation Reform Act of 1995,
as amended. Such statements may be identified by their use of terms
or phrases such as “expects,” “estimates,” “projects,” “believes,”
“anticipates,” “plans,” “could,” “would,” “may,” “will,” “intends,”
“outlook,” “focus,” “seek,” “potential,” “mission,” “continue,”
“goal,” “target,” “objective,” derivations thereof, and similar
terms and phrases. Forward-looking statements are based upon the
current beliefs and expectations of our management and are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified, which could cause future events and
actual results to differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements. In
this press release, statements relating to future financial results
and future financing and business opportunities are forward-looking
statements. Additional information concerning factors that could
cause actual events or results to differ materially from those in
any forward-looking statement is contained in our Form 10-K for the
fiscal year ended June 30, 2023, as filed with the SEC, as well as
other documents we have filed or will file with the
SEC. With respect to our proposed acquisition of
Touchsides, additional factors that could cause actual results to
differ materially from those indicated or implied by the
forward-looking statements include, among others: (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the share purchase agreement
relating to the proposed acquisition; (2) the ability to satisfy
all conditions to completion of the proposed acquisition, including
obtaining regulatory approvals; (3) unexpected costs, charges or
expenses resulting from the transaction; (4) the disruption of
management’s attention from our ongoing business operations due to
the proposed acquisition; (5) changes in the financial condition of
the markets that Touchsides serves; (6) risks associated with
Touchsides’ product and service offerings or its results of
operation; (7) the challenges, risks and costs involved with
integrating the operations of Touchsides with ours; and (8) our
ability to realize the anticipated benefits of the proposed
acquisition. We assume no obligation to update the information in
this press release, to revise any forward-looking statements or to
update the reasons actual results could differ materially from
those anticipated in forward-looking statements.
Investor Relations Contact:Phillipe
WelthagenEmail: phillipe.welthagen@lesakatech.comMobile: +27 84 512
5393
FNK IR:Rob Fink / Matt Chesler, CFAEmail:
lsak@fnkir.com
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