Acquisitions

6 Months Ended

Dec. 31, 2024

Acquisitions [Abstract]

Acquisitions

2. Acquisitions

The Company did not make any acquisition during the six months ended December 31, 2023. The cash paid, net of cash received

related to the Company’s acquisitions during the six months ended December 31, 2024, is summarized in the table below:

Total

Total cash paid

$

13,392

Less: cash acquired

9,435

Total cash paid, net of cash received

$

3,957

2. Acquisitions (continued)

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, and at acquisition it served

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. At acquisition, the Company’s

ecosystem served 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 total purchase consideration was ZAR

1.67

 billion ($

96.2

 million) and comprised the issuance of 17,279,803 shares of the

Company’s common stock (“Consideration Shares”) with a value of $

82.8

 million (

17,279,803

 multiplied by $

4.79

 per share) and

cash of $

13.4

 million. The purchase consideration was settled through the combination of the 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 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 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 resale registration statement was declared effective by the SEC on

December 6, 2024.

2. Acquisitions (continued)

2025 Acquisitions (continued)

October 2024 acquisition of Adumo (continued)

The Company incurred transaction-related expenditures of $

1.7

 million during the six months ended December 31, 2024, related

to the acquisition of Adumo. The Company’s accruals presented in Note 10 of as December 31, 2024, includes an accrual of transaction

related expenditures of $

0.6

 million and the Company does not expect to incur any further significant transaction costs over the

remainder of the 2025 fiscal year.

November 2024 acquisition of Innervation Value Added Services Namibia Pty Ltd (continued)

Effective November 1, 2024, the Company, through its wholly owned subsidiary Adumo Technologies Proprietary Limited

(“Adumo AT”), acquired the remaining shares (representing

50

% of the issued and outstanding shares) it did not own in Innervation

Value Added Services Namibia Pty Ltd (“IVAS Nam”) for $

0.4

 million (ZAR

6.0

 million, translated at November 1, 2024 exchange

rates). IVAS Nam was accounted for using the equity method prior to the acquisition of a controlling interest in the company. Adumo

paid ZAR

2.0

 million of the purchase price prior the acquisition of Adumo by the Company and the balance of ZAR

4.0

 million will

be paid in

two

 equal tranches, one in March 2025 and the other in September 2025. The Company did not incur any significant

transaction costs related to this acquisition.

The preliminary purchase price allocation of acquisitions during the six months ended December 31, 2024, translated at the

foreign exchange rates applicable on the date of acquisition, in provided is the table below:

Acquisitions during fiscal 2025 through December 31, 2024

Adumo

IVAS Nam

Total

Cash and cash equivalents 

$

9,219

$

216

$

9,435

Accounts receivable

6,800

630

7,430

Inventory 

5,121

3

5,124

Property, plant and equipment

9,169

12

9,181

Operating lease right of use asset

1,024

-

1,024

Equity-accounted investment

477

-

477

Goodwill

72,299

432

72,731

Intangible assets

28,383

-

28,383

Deferred income taxes assets

1,060

55

1,115

Other long-term assets

2,809

-

2,809

Current portion of long-term borrowings

(1,178)

-

(1,178)

Accounts payable 

(3,266)

(388)

(3,654)

Other payables 

(28,045)

(226)

(28,271)

Operating lease liability - current

(1,019)

-

(1,019)

Income taxes payable 

(150)

(42)

(192)

Deferred income taxes liabilities

(6,994)

-

(6,994)

Operating lease liability - long-term

(326)

-

(326)

Long-term borrowings

(7,308)

-

(7,308)

Other long-term liabilities

(141)

-

(141)

Settlement assets 

8,610

-

8,610

Settlement liabilities 

(8,530)

-

(8,530)

Fair value of assets and liabilities on acquisition

$

88,014

$

692

$

88,706

The fair value of the non-controlling interests recorded was $

7.6

 million. The fair value of the non-controlling interest was

determined as the non-controlling interests respective portion of the equity value of the entity acquired by the Company, and which

was adjusted for a

20

% minority discount. The allocation of the purchase price is preliminary and not yet finalized. The preliminary

allocation of the purchase price is based upon preliminary estimates which used information that was available to management at the

time the unaudited condensed consolidated financial statements were prepared and these estimates and assumptions are subject to

change within the measurement period, up to one year from the acquisition date. Accordingly, the allocation may change. We continue

to refine certain inputs to the calculation of acquired intangible assets and the valuation of the non-controlling interest. 

2. Acquisitions (continued)

2025 Acquisitions (continued)

Intangible assets acquired

No

 intangible assets were identified related to the acquisition of IVAS Nam. Summarized below is the fair value of the Adumo

intangible assets acquired and the weighted-average amortization period:

Fair value as of

acquisition date

Weighted-average

amortization

period (in years)

Finite-lived intangible asset:

Acquired during the six months ended December 31, 2024:

Adumo – technology assets

$

13,949

3

 -

7

Adumo – customer relationships

10,813

5

 -

10

Adumo – brands

$

3,621

10

 -

15

On acquisition, the Company recognized a deferred tax liability of approximately $

7.7

 million related to the acquisition of Adumo

intangible assets during the six months ended December 31, 2024.

Pro forma results related to acquisitions

Pro forma results of operations have not been presented for the acquisition of IVAS Nam because the effect of the IVAS Nam

acquisition is not material to the Company. Since the closing of the IVAS Nam acquisition, it has contributed revenue and net income

of $

0.9

 million and $

0.2

 million, respectively, for the six months ended December 31, 2024.

The results of Adumo’s operations are reflected in the Company’s financial statements from October 1, 2024. The following

unaudited pro forma revenue and net income information has been prepared as if the acquisition of Adumo had occurred on July 1,

2023 using the applicable average foreign exchange rates for the periods presented:

Three months

ended

December 31,

2023

Six months ended 

December 31, 

2024

2023

Revenue

$

159,397

$

305,748

$

307,897

Net loss

$

(3,040)

$

(35,024)

$

(15,088)

The unaudited pro forma financial information presented above includes the business combination accounting and other effects

from the acquisition including (1) amortization expense related to acquired intangibles and the related deferred tax; (2) the loss of

interest income, net of taxation, as a result of funding a portion of the purchase price in cash; and (3) an adjustment to exclude all

applicable transaction-related costs recognized in the Company’s consolidated statement of operations for six months ended December

31, 2024, and include the applicable transaction -related costs for the year ended June 30, 2024. The unaudited pro forma net income

presented above does not include any cost savings or other synergies that may result from the acquisition.

The unaudited pro forma information as presented above is for information purposes only and is not indicative of the results of

operations that would have been achieved if the acquisition had occurred on these dates. 

Since the closing of the acquisition, Adumo has contributed revenue of $

17.0

 million and net income attributable to the Company,

including intangible assets amortization related to assets acquired, net of deferred taxes, of $

0.45

 million.