Nedbank Group has entered into an agreement to acquire 100% of South African fintech company iKhokha Proprietary Limited for approximately R1.65 billion in cash, subject to certain adjustments at conclusion.
The acquisition, announced on Tuesday, is expected to conclude in the coming months, pending customary regulatory approvals.
ADVERTISEMENT
CONTINUE READING BELOW
Listen/read: South Africa’s R1trn sector: Spaza shops, taxis and backrooms
The deal forms part of Nedbank’s strategy to strengthen its position in the small and medium-sized enterprise (SME) market through digital innovation and inclusive financial services, the group said.
“We believe that empowering entrepreneurs is essential to building a thriving and inclusive economy. iKhokha’s mission and technology align perfectly with our vision for digital transformation in the SME sector,” said Nedbank Group CEO Jason Quinn.
“Together, we will unlock new opportunities for growth and financial inclusion in South Africa and potentially abroad.”
Wholly owned subsidiary
Once the acquisition is finalised, iKhokha will become a wholly owned subsidiary of Nedbank but will continue to operate under its own brand and leadership team.
According to Nedbank, the agreement includes a comprehensive management lock-in to ensure continuity and alignment with long-term growth objectives.
“Joining forces with Nedbank gives us the platform to scale our impact, further accelerate product innovation, and unlock new value for our merchants,” said Matt Putman, co-founder and CEO of iKhokha.
“There is great alignment across both leadership teams on the synergies that can be unlocked through this transaction, and we believe our combined strengths will result in a truly differentiating and highly competitive value proposition for SMEs in market,” he added.
Read/listen:
Nedbank sheds over 5% as market reacts to softer guidance
Nedbank plans to sell Ecobank stake as it resets Africa strategy
Some 70% of SMMEs in SA still married to cash – iKhokha co-founder
ADVERTISEMENT:
CONTINUE READING BELOW
Founded in 2012, iKhokha provides card machines, digital payment solutions, and business management tools to SMEs. The fintech processes more than R20 billion annually in digital payments and has disbursed over R3 billion in working capital to the SME sector.
iKhokha has been backed by growth-stage private equity investor Apis Partners since 2016. Apis focuses on investments in financial services and related technology in high-growth markets.
Listen/read:
SME survey uncovers surge in optimism [Oct 2024]
Apis-led consortium buys SA payments firm Sureswipe [May 2019]
Nedbank said the acquisition is a significant milestone in its SME-focused growth strategy, aimed at delivering accessible, affordable, and technology-driven financial services to entrepreneurs.
Shares in Nedbank Group gained around 2% on Wednesday morning, following the announcement.
Nedbank share price
Follow Moneyweb’s in-depth finance and business news on WhatsApp here.