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Acquisitions
 3 Months Ended
Sep. 30, 2024
Acquisitions [Abstract]  
Acquisitions
20.
 
Acquisitions
2025
 
Acquisitions
October 2024 acquisition of Adumo
On May 7,
 
2024, the Company
 
entered into a
 
Sale and Purchase
 
Agreement (the “Purchase
 
Agreement”) with Lesaka
 
SA, and
Crossfin Apis Transactional
 
Solutions (Pty) Ltd
 
and Adumo ESS
 
(Pty) Ltd (“the
 
Sellers”). Pursuant to
 
the Purchase Agreement
 
and
subject to its terms and
 
conditions, Lesaka, through its
 
subsidiary,
 
Lesaka SA, agreed to
 
acquire, and the Sellers agreed
 
to sell, all of
the
 
outstanding
 
equity
 
interests
 
and
 
certain
 
claims
 
in
 
the
 
Adumo
 
(RF)
 
Proprietary
 
Limited
 
(“Adumo”).
 
The
 
transaction
 
closed
 
on
October 1, 2024.
Adumo is an
 
independent payments and commerce
 
enablement platform in Southern
 
Africa, serving approximately
23,000
 
active
merchants with
 
operations across
 
South Africa,
 
Namibia, Botswana
 
and Kenya.
 
For more
 
than two
 
decades, Adumo
 
has facilitated
physical and online commerce between retail merchants and end-consumers by offering
 
a unique combination of payment processing
and integrated software
 
solutions, which currently
 
include embedded payments,
 
integrated payments, reconciliation services,
 
merchant
lending, customer engagement tools, card issuing program management
 
and data analytics.
 
Adumo operates
 
across three businesses,
 
which provide
 
payment processing
 
and integrated software
 
solutions to different
 
end
markets:
●
The
 
Adumo
 
Payments
 
business
 
offers
 
payment
 
processing,
 
integrated
 
payments
 
and
 
reconciliation
 
solutions
 
to
 
small-and-
medium (“SME”) merchants in
 
South Africa, Namibia and
 
Botswana, and also provides
 
card issuing program management
 
to
corporate clients such as Anglo American and Coca-Cola;
●
The Adumo ISV business, also known as GAAP,
 
has operations in South Africa, Botswana and Kenya, and clients in a further
21
 
countries,
 
and
 
is
 
the
 
leading
 
provider
 
of
 
integrated
 
point-of-sales
 
software
 
and
 
hardware
 
to
 
the
 
hospitality
 
industry
 
in
Southern Africa, serving clients such as KFC, McDonald’s,
 
Pizza Hut, Nando’s and Krispy
 
Kreme; and,
 
●
The Adumo
 
Ventures
 
business offers
 
online commerce
 
solutions (Adumo
 
Online), cloud-based,
 
multi-channel point-of-sales
solutions
 
(Humble)
 
and
 
an
 
aggregated
 
payment
 
and
 
credit platform
 
for
 
in-store
 
and
 
online
 
commerce
 
(SwitchPay)
 
to SME
merchants and corporate clients in South Africa and Namibia.
 
The acquisition continues the Company’s
 
consolidation in the Southern African
 
fintech sector.
 
The Company’s
 
ecosystem now
serves approximately
1.7
 
million active consumers,
120,200
 
merchants, and processes over ZAR
270
 
billion in throughput (cash, card
and VAS)
 
per year. The acquisition of Adumo enhances the Company’s strength in both the consumer and merchant markets in which
it operates.
The purchase consideration was settled through the combination of an issuance of
17,279,803
 
shares of the Company’s common
stock (“Consideration
 
Shares”) and
 
a ZAR
232.2
 
million ($
13.4
 
million, translated
 
at the
 
prevailing rate
 
of $1:
 
ZAR
17.3354
 
as of
October 1, 2024) payment in cash. The Company’s
 
closing price on the Johannesburg Stock Exchange on October 1, 2024, was ZAR
83.05
 
($
4.79
 
using
 
the
 
October
 
1,
 
2024,
 
$1:
 
ZAR
 
exchange
 
rate).
 
The
 
total
 
purchase
 
consideration
 
was
 
ZAR
1.67
 
billion
 
($
96.2
million).
The
 
closing
 
of
 
the
 
transaction
 
was
 
subject
 
to
 
customary
 
closing
 
conditions,
 
including
 
(i)
 
approval
 
from
 
the
 
competition
authorities of South
 
Africa and
 
Namibia; (ii) exchange
 
control approval from
 
the financial surveillance
 
department of the
 
South African
Reserve
 
Bank;
 
(iii)
 
approval
 
from
 
all necessary
 
regulatory
 
bodies
 
and
 
from
 
shareholders
 
to
 
issue
 
the
 
Consideration
 
Shares
 
to
 
the
Sellers; (iv) obtaining
 
certain third-party
 
consents; (v) the
 
Company obtained confirmation
 
from RMB that
 
it has sufficient
 
funds to
settle the
 
cash portion
 
of the purchase
 
consideration; (vi)
 
approval of
 
Adumo shareholders
 
(including preference
 
shareholders) with
respect to entering into and implementation of the Purchase Agreement, and
 
all other agreements and transactions contemplated in the
Purchase Agreement;
 
(vii) obtained
 
the consent
 
of Adumo’s
 
lender regarding
 
Adumo entering
 
into and
 
implementing the
 
Purchase
Agreement, and
 
all other
 
agreements and
 
transactions contemplated
 
in the
 
Purchase Agreement;
 
(viii) the
 
release of
 
certain Seller’s
shares held
 
as security
 
by such
 
bank; (ix)
 
consent of
 
the lender
 
of one
 
of Adumo’s
 
shareholders regarding
 
Adumo entering
 
into the
transaction;
 
(x)
 
the
 
Company
 
signing
 
a
 
written
 
addendum
 
to
 
the
 
Policy
 
Agreement
 
with
 
International
 
Finance
 
Corporation
 
that
provides for the inclusion
 
of the Consideration
 
Shares attributable to certain
 
Seller shareholders
 
in the definition of
 
“Put Shares” under
the
 
Policy
 
Agreement,
 
and
 
related
 
change;
 
and
 
(xi)
 
a
 
Seller
 
(or
 
their
 
nominee),
 
which
 
ultimately
 
was
 
Crossfin,
 
concluding
 
share
purchase agreements to dispose
 
of an amount of Consideration
 
Shares (which ultimately was determined
 
as
3,587,332
 
Consideration
Shares).
The
 
Company
 
has
 
agreed
 
to file
 
a
 
resale
 
registration
 
statement
 
with
 
the United
 
States Securities
 
and
 
Exchange
 
Commission
(“SEC”)
 
covering
 
the
 
resale
 
of
 
the
 
Consideration
 
Shares
 
by
 
the
 
Sellers.
 
The
 
Company
 
has
 
undertaken
 
to
 
use
 
its
 
commercially
reasonable efforts to have the resale registration statement declared
 
effective by the SEC following its filing.
The
 
Company
 
incurred
 
transaction-related
 
expenditures
 
of $
1.7
 
million
 
during
 
the
 
three
 
months
 
ended
 
September
 
30,
 
2024,
related
 
to
 
acquisition
 
of
 
Adumo.
 
The
 
Company’s
 
accruals
 
presented
 
in
 
Note
 
9
 
of
 
as
 
September
 
30,
 
2024,
 
includes
 
an
 
accrual
 
of
transaction related
 
expenditures of
 
$
2.2
 
million and
 
the Company
 
does not
 
expect to
 
incur any
 
further significant
 
transaction costs
over the remainder of the 2025 fiscal year.
On
 
October
 
1,
 
2024,
 
Lesaka
 
SA
 
and
 
Crossfin
 
entered
 
into
 
a
 
share
 
purchase
 
agreement
 
under
 
which
 
Lesaka
 
SA
 
purchased
2,601,410
 
of the
3,587,332
 
Consideration Shares for ZAR
207.2
 
million ($
12.0
 
million). The transaction was settled in early October
2024,
 
and the shares of Company’s common
 
stock repurchased will be included in the Company’s
 
treasury shares.
The
 
Company
 
has
 
commenced
 
the
 
purchase
 
price
 
allocation
 
related
 
to
 
this
 
transaction.
 
However,
 
the
 
process
 
had
 
not
 
been
completed
 
as of
 
the date
 
of filing
 
this Quarterly
 
Report on
 
Form 10-Q
 
on November
 
6, 2024.
 
The Company
 
expects to
 
include its
preliminary allocation
 
of the purchase consideration
 
related to this acquisition
 
in its unaudited
 
financial statements to
 
be included
 
in
its Quarterly Report on Form 10-Q for the quarterly period ended
 
December 31, 2024.