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Acquisitions
 12 Months Ended
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.