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Acquisitions | 12 Months Ended
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Jun. 30, 2023
Acquisitions [Abstract] |
Acquisitions | 3. ACQUISITIONS The Company did not make any acquisitions during the years ended June 30, 2023 and 2021. The cash paid, net of cash received related to the Company’s acquisition during the year ended June 30, 2022, is summarized in the table below: 2022 Total cash paid $ 240,582 Less: cash acquired 38,423 Total cash paid, net of cash received (1) $ 202,159 (1) – represents the cash paid, net of cash acquired, to acquire a controlling interest in the Connect. 2023 Acquisitions None. 2022 Acquisitions April 2022 acquisition of Connect On October 31, 2021, the Company entered into a Sale of Shares Agreement (the “Sale Agreement”) with the Sellers (as defined in the Sale Agreement), Cash Connect Management Solutions Proprietary Limited (“CCMS”), Ovobix (RF) Proprietary Limited (“Ovobix”), Luxiano 227 Proprietary Limited (“Luxiano”) and K2021477132 (South Africa) Proprietary Limited (“K2021” and together with CCMS, Ovobix and Luxiano, “Connect”). Pursuant to the Sale Agreement, and subject to its terms and conditions, the Company’s wholly-owned subsidiary, Lesaka SA (formerly named Net1 SA), agreed to acquire, and the Sellers agreed to sell, all of the outstanding equity interests and certain claims in Connect. The transaction closed on April 14, 2022. The total purchase consideration was ZAR 3.8 billion ($ 258.9 million), comprising ZAR 3.5 billion ($ 240.6 million) in cash, contingent consideration of ZAR 23.8 million ($ 1.6 million), and ZAR 241.9 million ($ 16.7 million) in 3,185,079 shares of the Company’s common stock. The contingent consideration related to a tax matter which was resolved in July 2022, and the consideration was settled in cash in September 2022. The contingent consideration is included in the caption other payables in the Company’s consolidated balance sheet as of June 30, 2022, refer to Note 13. The 3,185,079 shares of common stock are issuable in three equal tranches on each of the first, second and third anniversaries of the closing and was calculated as ZAR 350.0 million divided by the sum of $ 7.50 multiplied by the closing date exchange rate (as defined in the Sale Agreement) of $1:ZAR 14.65165 . Refer to Note 14 for issuances during the year ended June 30, 2023. The fair value of the purchase consideration settled in shares of common stock of $ 16.7 million was calculated as 3,185,079 shares of Lesaka common stock multiplied by the April 13, 2022 closing price on the NasdaqGS of $ 5.23 . 3. ACQUISITIONS (continued) 2022 Acquisitions (continued) April 2022 acquisition of Connect (continued) The closing of the transaction was subject to customary closing conditions, including (i) approval from the competition authorities of South Africa, Namibia and Botswana, (ii) exchange control approval from the financial surveillance department of the South African Reserve Bank, and (iii) obtaining certain third-party consents. In addition, the closing of the transaction was subject to entry into definitive financing agreements by each of Lesaka SA and CCMS for an aggregate of ZAR 2.4 billion in debt financing provided by Rand Merchant Bank and satisfying the conditions precedent for funding thereunder, of which ZAR 1.1 billion relates to the financing agreements described below and ZAR 1.3 billion related to finance agreements signed between CCMS and RMB. Of the ZAR 1.3 billion related to CCMS, approximately ZAR 250 million related to new debt as part of the funding of the acquisition. The definitive loan agreements became effective upon closing the transaction , refer to Note 12. The South African competition authorities approved the transaction subject to certain public interest conditions relating to employment, increasing the spread of ownership by historically disadvantaged people (“HDPs”) and workers, and investing in supplier and enterprise development. Further to increasing the spread of ownership by HDPs, Lesaka is required to establish an employee share ownership scheme (“ESOP”) within 36 months of the implementation of the Connect acquisition that complies with certain design principles for the benefit of the workers of the merged entity to receive a shareholding in Lesaka equal in value to at least 3 % of the issued shares, or approximately 1.8 million shares, in Lesaka at the date of the Connect acquisition. If within 24 months of the implementation date of the transaction, Lesaka generates a positive net profit for three consecutive quarters, the ESOP shall increase to 5 % of the issued shares, or approximately 3.0 million shares, in Lesaka at the date of the Connect acquisition. The final structure of the ESOP is contingent on Lesaka shareholder approval and relevant regulatory and governance approvals. The ESOP had not been established as of the date of the consolidated annual financial statements. The Company incurred transaction-related expenditures of $ 6.0 million during the year ended June 30, 2022, related to the acquisition of Connect. On acquisition, the Company recognized a deferred tax liability of approximately $ 50.3 million related to the acquisition of Connect intangible assets during the year ended June 30, 2022. The final purchase price allocation of the Connect acquisition, translated at the foreign exchange rates applicable on the date of acquisition, is provided in the table below: Connect April 2022 Cash and cash equivalents $ 38,423 Accounts receivable 24,032 Finance loans receivable 15,706 Inventory 11,431 Property, plant and equipment 20,872 Operating lease right of use asset 753 Equity-accounted investment 73 Goodwill 153,693 Intangible assets 179,484 Deferred income taxes assets 2,284 Short term facilities (16,903) Accounts payable (27,914) Other payables (4,793) Operating lease liability – current (434) Current portion of long – term borrowings - Income taxes payable (982) Deferred income taxes liabilities (50,255) Operating lease liability - long-term (319) Long-term borrowings (86,960) Settlement assets 13,561 Settlement liabilities (12,875) Fair value of assets and liabilities on acquisition $ 258,877 2021 Acquisitions None.

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