Acquisitions

9 Months Ended

Mar. 31, 2025

Acquisitions [Abstract]

Acquisitions

2. Acquisitions

The Company did not make any acquisition during the nine months ended March 31, 2024. The cash paid, net of cash received

related to the Company’s acquisitions during the nine months ended March 31, 2025, is summarized in the table below:

Total

Total cash paid

$

24,161

Less: cash acquired

11,207

Total cash paid, net of cash received

$

12,954

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 the Adumo Payouts business provides card issuing

program management to corporate clients such as Anglo American and Coca-Cola;

●

The Adumo ISV business, 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). 

2. Acquisitions (continued)

2025 Acquisitions (continued)

October 2024 acquisition of Adumo (continued)

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.

The Company incurred transaction-related expenditures of $

1.7

 million during the nine months ended March 31, 2025, related

to the acquisition of Adumo. The Company’s accruals presented in Note 10 of as March 31, 2025, includes an accrual of transaction

related expenditures of $

0.4

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

remainder of the 2025 fiscal year.

March 2025 acquisition of Recharger

On November 19, 2024, the Company, through Lesaka SA, entered into a Sale of Shares Agreement (the “Recharger Purchase

Agreement”) with Imtiaz Dhooma (Recharger’s former chief executive officer) and Ninety Nine Proprietary Limited (“the Seller”).

Pursuant to the Recharger Purchase Agreement and subject to its terms and conditions, Lesaka, through its subsidiary, Lesaka SA,

agreed to acquire, and the Seller agreed to sell, all of the outstanding equity interests in Recharger Proprietary Limited (“Recharger”).

The transaction closed on March 3, 2025. 

At the same time, Recharger also entered into independent contractor agreement with Recharger’s former chief executive officer

which has a term of

12

 months and requires him, among other things, to support operational activities of the Recharger business, in

consultation with Company representatives, facilitate the handover process and assist Recharger in transitioning ownership to Lesaka

SA, avail himself for important customer and vendor meetings, attend scheduled weekly management committee meetings regarding

operational and business activities of the Recharger business, and providing support on an ad-hoc basis to Company representatives

with regard to operational matters and in facilitating the hand over, as and when reasonably required.

This acquisition will be reported as part of the Company’s Enterprise Division and demonstrates positive advancement of the

Company’s strategy in its Enterprise Division. The Company expects the acquisition to act as an entry point for it into the South

African private utilities space while augmenting the Enterprise division’s alternative payment offering. 

The transaction consideration per the Recharger Purchase Agreement was ZAR

503.4

 million ($

27.0

 million) and comprised

ZAR

328.4

 million ($

17.6

 million) in cash and ZAR

175.0

 million ($

9.4

 million) in shares of the Company’s common stock, to be

settled in two tranches. The share price applied to determine the number of shares of common stock to be issued for the equity

consideration is based on the volume-weighted average price of the Company’s common shares for the three-month period prior to

the disbursal of each tranche. Lesaka SA extended a ZAR

43.1

 million ($

2.3

 million) loan to Recharger at closing which was

exclusively used to repay an existing loan due by Recharger to the Seller. 

The first tranche, comprising ZAR

153.4

 million ($

8.2

 million) in cash and

1,092,361

 shares of the Company’s common stock

with a value of ZAR

98.3

 million ($

5.3

 million), was settled at closing. The value of the shares of common stock were calculated using

the shares issued multiplied by the Company’s closing price on the Johannesburg Stock Exchange on March 3, 2025, of ZAR

90.00

,

and translated to U.S. dollars at the exchange rate of $1: ZAR

18.63

. Lesaka SA delivered the

1,092,361

 shares of the Company’s

common stock from a pool of shares it purchased in October 2024, and the Company recognized a gain in additional paid-in-capital

of $

0.4

 million related to the difference between in the value on March 3, 2025, and the price paid per share in October 2024.

2. Acquisitions (continued)

2025 Acquisitions (continued)

March 2025 acquisition of Recharger (continued)

The total purchase consideration was ZAR

294.8

 million ($

15.8

 million) and comprised the issuance of the

1,092,361

 shares of

the Company’s common stock with a value of ZAR

98.3

 million ($

5.3

 million), the settlement of the pre-existing relationship loan of

ZAR

43.1

 million ($

2.3

 million) and cash of ZAR

153.4

 million ($

8.2

) million.

The second and final tranche is due on March 3, 2026, and comprises a contractual cash payment of ZAR

175.0

 million ($

9.4

million) and the delivery of shares of Lesaka’s common stock with a contractual value of ZAR

75.0

 million ($

4.0

 million). Pursuant

to the Recharger Purchase Agreement, payment of the second tranche in March 2026 is contingent on Recharger’s former chief

executive officer ’s ongoing service under the independent contractor agreement until March 3, 2026. If the future services are not

provided, then the second tranche will not be paid, except if failure to provide future services is due to expiry of the contract, mutual

agreement or death of the former chief executive officer. The former chief executive officer is also a director of the Seller, and signed

the Recharger Purchaser Agreement on behalf of himself, Recharger and the Seller. He has also signed an independent contractor

agreement under which he is required to provide post-combination service to Recharger. The Company has determined that as the

payment of the second tranche is contingent on these post-combination services, the value of the second tranche is not treated as

purchase consideration and rather, under U.S. GAAP, represents compensation for post-combination services.

The post-combination services for the three and nine months ended March 31, 2025, of $

1.1

 million was calculated as the sum

of one twelfth of the future cash payment and one twelfth of the value of future shares to be provided. The value of the future shares

to be provided was calculated using the contractual value of ZAR

75.0

 million divided by the volume-weighted average price of the

Company’s common shares for the three-month period prior to March 31, 2025, divided by twelve and at the applicable exchange rate.

The post-combination compensation charge is included in the caption transaction costs related to Adumo and Recharger acquisitions

and certain compensation costs included on the unaudited condensed consolidated statement of operations. 

Refer to Note 13 for additional information. The liability for the future payments is included in the caption Other payables in the

unaudited condensed consolidated balance sheet as of March 31, 2025, refer to Note 10.

The Company incurred transaction-related expenditures of $

0.3

 million during the nine months ended March 31, 2025, related

to the acquisition of Recharger. The Company does not expect to incur any further significant transaction costs over the remainder of

the 2025 fiscal year.

Other acquisitions

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 to 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 Company, through Lesaka SA, acquired

100

% of Genisus Risk (Pty) Ltd for a cash consideration of ZAR

2.0

 million ($

0.1

million). The Company did not incur any significant transaction costs related to this acquisition.

The Company, through its wholly owned subsidiary Cash Connect Management Solutions Proprietary Limited (“CCMS”),

acquired

100

% of Master Fuel (Pty) Ltd (“Master Fuel) for a cash consideration of ZAR

2.0

 million ($

0.1

 million). The Company did

not incur any significant transaction costs related to this acquisition.

2. Acquisitions (continued)

2025 Acquisitions (continued)

The preliminary purchase price allocation of acquisitions during the nine months ended March 31, 2025, translated at the foreign

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

Acquisitions during fiscal 2025 through March 31, 2025

Adumo

Recharger

Other

Total

Cash and cash equivalents 

$

9,227

$

1,720

$

260

$

11,207

Accounts receivable

6,799

17

706

7,522

Inventory 

5,122

194

3

5,319

Property, plant and equipment

9,170

39

15

9,224

Operating lease right of use asset

1,025

401

-

1,426

Equity-accounted investment

477

-

-

477

Goodwill

73,173

2,878

539

76,590

Intangible assets

27,187

17,179

69

44,435

Deferred income taxes assets

1,061

81

55

1,197

Other long-term assets

2,809

-

-

2,809

Current portion of long-term borrowings

(1,178)

-

-

(1,178)

Accounts payable 

(3,266)

(149)

(428)

(3,843)

Other payables 

(28,044)

(1,439)

(252)

(29,735)

Operating lease liability - current

(1,019)

(185)

-

(1,204)

Income taxes payable 

(150)

(4)

(42)

(196)

Deferred income taxes liabilities

(6,670)

(4,638)

(19)

(11,327)

Operating lease liability - long-term

(326)

(269)

-

(595)

Long-term borrowings

(7,308)

-

-

(7,308)

Other long-term liabilities

(140)

-

-

(140)

Settlement assets 

8,603

-

-

8,603

Settlement liabilities 

(8,530)

-

-

(8,530)

Fair value of assets and liabilities on acquisition

$

88,022

$

15,825

$

906

$

104,753

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 related to the various acquisitions 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, for Adumo, 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 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 nine months ended March 31, 2025:

Adumo – technology assets

$

13,997

3

 -

7

Adumo – customer relationships

9,567

5

 -

10

Adumo – brands

3,623

10

 -

15

Recharger – technology assets

1,074

4

Recharger – customer relationships

16,105

5

Genisus Risk – technology assets

68

0.1

On acquisition of these businesses, the Company recognized an aggregate deferred tax liability of approximately $

12.0

 million

related to the acquisition of intangible assets during the nine months ended March 31, 2025.

Transaction costs and certain compensation costs

The table below presents transaction costs incurred related to the acquisition of Adumo and Recharger, as well as certain post-

combination compensation costs expensed during the three and nine months ended March 31, 2025 and 2024:

Three months ended

March 31,

Nine months ended March

31,

2025

2024

2025

2024

Adumo transaction costs

$

-

$

631

$

1,702

$

665

Recharger transaction costs

(1)

92

-

342

-

Recharger post-combination services expensed

1,130

-

1,130

-

Total

$

1,222

$

631

$

3,174

$

665

(1) Recharger transactions costs for the six months ended March 31, 2025, of $

0.25

 million have been allocated from Selling,

general and administration to Transaction costs related to Adumo and Recharger and certain compensation costs in the unaudited

condensed consolidated statement operations for the nine months ended March 31, 2025.

Pro forma results related to acquisitions

Pro forma results of operations have not been presented for the acquisition of IVAS Nam, Genisus Risk and Master Fuel because

the effect of these acquisitions, individually and in aggregate, are not material to the Company. Since the closing of these acquisitions,

they have contributed revenue and net income of $

0.2

 million and $

0.1

 million, respectively, for the nine months ended

March 31, 2025.

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

and March 3, 2025, respectively. The following unaudited pro forma revenue and net income information has been prepared as if the

acquisitions of Adumo and Recharger had occurred on July 1, 2023, using the applicable average foreign exchange rates for the periods

presented:

Three months ended 

March 31, 

Nine months ended 

March 31, 

2025

2024

2025

2024

Revenue

$

137,713

$

153,890

$

449,891

$

466,873

Net loss

$

(21,810)

$

(3,292)

$

(56,292)

$

(23,846)

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

from the acquisitions 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; (3) an adjustment to exclude all applicable

transaction-related costs recognized in the Company’s consolidated statement of operations for three and nine months ended March

31, 2025, and include the applicable transaction-related costs for the year ended June 30, 2024; an adjustment to exclude the post-

combination compensation expenses related to the Recharger acquisition recognized in the Company’s consolidated statement of

operations for three and nine months ended March 31, 2025, and include the expense during 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 acquisitions, Adumo and Recharger have contributed aggregate revenue of $

32.2

 million and net income

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

0.68

 million.