Actis has bought Paycorp, a Johannesburg-based payments business, for $95 million.
The emerging-market firm is to acquire the company from Transaction Capital, a South African financial services group, along with its management team. Still subject to shareholder and regulatory approval, the transaction is expected to close by the end of the year.
Established in 1999, Paycorp is the pioneer and largest independent owner of off-site ATMs in South Africa, operating almost 5,000 cash dispensers across the country. It also provides credit and debit card terminals, and is a deployer of visa-certified prepaid debit cards. It counts around 390 employees.
With only 60 percent of the population using bank accounts and 90 percent of transactions conducted in cash, the company is well placed to benefit from the emergence of South Africa’s payments industry, Actis said.
Paycorp is South Africa's
“Paycorp provides broader access to transactional services for the under-banked population,” said Natalie Kolbe, a partner at Actis, in a statement. “As a South African I have seen first-hand the country’s need for this type of critical social infrastructure, which can help boost financial inclusion.”
The deal represents Actis’ fifth investment in a payments business in the last three years. Others included investments in India’s AGS, an ATM outsourcing company, and Emerging Markets Payment Holdings, an electronic payment processor group. The transaction deepens the firm’s exposure to the African financial services industry, in which it is invested through its holdings in Alexander Forbes, Diamond Bank and Commercial International Bank.
The transaction also suggests that, despite South Africa’s relative maturity compared to other Sub-Saharan markets, the country continues to attract GPs eager to gain exposure to Africa’s growing consumer class. It comes less than a week after Capital Works, a South-African firm, reached a final close on its second fund.
“The Sub Saharan growth opportunity is quite exciting. We do see a lot of future growth and future returns coming out of South African businesses expanding their footprint or developing business opportunities into Sub Saharan Africa,” Capital Works co-founder and chairman Chad Smart told Private Equity International last week.
The firm’s latest vehicle managed to hit its R2.7 billion (€210 million, $270 million) hard-cap in just six months, from a range of both domestic and international investors.