Mergers and acquisitions worth US$52B were completed in South Africa during the first half of 2021, with the value of deals growing by 958% from 2020 with the tech sector in the lead according to Refinitiv Data that provides financial markets and infrastructure data.
According to Digest Africa, the value of mergers and acquisitions in the African tech ecosystem in 2018 was US$504M with 24 out of the 39 deals taking place in South Africa making it the country with the most mergers, acquisitions and exits among the KINGS countries. Which is why am focusing this oped about the 5th KINGS (Kenya, Ivory Coast, Nigeria, Ghana and South Africa) on mergers, acquisitions and exits.
On the 1st of September 2021, ZipCo announced plans to fully acquire South African buy-now-pay-later (BNPL) fintech, Payflex. On the 17th of the same month, Tech company Advannotech Pty Ltd, acquired IT-TEC MN Pty Ltd a Western Cape-based information technology company specializing in ICT support, security, networking and infrastructure. In March, First National Bank (FNB) acquired local fintech firm Selpal.
South Africa and Nigeria, the two leading economies in Africa, have always been in fierce competition with each other. South Africa’s leading fintech, MFS Africa founded by Dare Okoudjou in 2010, announced on 20th October 2021 their acquisition of one of Nigeria’s leading super-agent networks, Baxi, subject to approval from the Central Bank of Nigeria5 making it the biggest intra-Africa acquisition and the second highest acquisition in Nigeria to date after the Stripe acquisition of Paystack last year. This seems like a response to Nigeria’s Jiji acquisition of South Africa’s Naspers’ OLX operations in 2019. Baxi’s 90,000 agent network processed over US$1B in transactions in 2021 to date. MFS Africa is the largest fintech interoperability hub in Africa connecting telecoms companies, banks and mobile money (Momo) operators across over 35 countries via a single Application Protocol Interface (API) with an estimated 320M Momo customers in 35 countries in Africa. At the height of the pandemic in 2020, MFS Africa acquired Beyonic in Uganda – another strategic acquisition that increased their footprint in East Africa in the same way the Baxi one increased their footprint in West Africa. In 2016, the company took a majority position in Sochitel, a leading airtime top-up provider based in London with operations in Joburg, Douala and Accra which they exited in 2020 at 3.5x book value.
