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Merger and Acquisition

MFS Africa Acquires Baxi, Expand Operations Into Africa’s Largest Economy

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Baxi Nigeria-Investors King

MFS Africa, the largest pan-African digital payments hub, announced it had signed an agreement to acquire Baxi, one of Nigeria’s largest independent SME-focused electronic payment networks. The deal, which is subject to approval from the Central Bank of Nigeria, will be the second-highest fintech acquisition in Nigeria to date.

Nigeria, Africa’s largest economy is the largest remittance market in Africa with one-third of intra-Africa remittance flows. MFS Africa’s presence in Nigeria to date has been limited given the country’s small number of mobile wallets. With the acquisition of Baxi, MFS Africa will expand its pan-African network into Nigeria, connecting Nigerian businesses to the continent and the rest of the world.

According to MFS Africa Founder and CEO Dare Okoudjou, he said, “this deal is a pivotal step in our journey. By combining Baxi’s network of SMEs operating as agents with our pan-African network, we aim to take Nigeria’s SMEs to the rest of Africa and the world. Our expansion into Nigeria brings us one step closer in our mission of making borders matter less,”

Baxi was founded in 2014 by Degbola Abudu and Folu Majekodunmi, the electronic payment network provides a cash-in/cash-out offering as well as value-added services — account opening, money transfer, bill payment and more — to the last mile. Through its network of more than 90,000 agents, Baxi has already processed over USD 1 Billion in transactions this year.

Following the acquisition’s close, MFS Africa will build Baxi into a key node on its digital payment network, allowing customers to make regional and global payments to and from Nigeria. MFS Africa will also expand Baxi’s proposition for offline SMEs to select markets within MFS Africa’s footprint of 320 million mobile wallets across more than 35 African countries.

Previous restrictions to mobile network operators’ participation in mobile money services have restrained the sector’s growth in Nigeria. To serve the more than 55% of Nigerian consumers currently excluded from formal financial services, Nigerian fintechs that have built strong agent networks are the crucial interface to reach Nigeria’s ~31m financially underserved and ~67m financially unserved populations. Supporting and nurturing SMEs is crucial to Nigeria’s economy, as they contribute 50% of Gross Domestic Product and provide 76% of jobs. With its presence in 36 Nigerian states, Baxi fills a critical gap by providing unbanked Nigerians and informal SMEs access to financial services.

The focus areas of both companies are complementary. Baxi simplifies and integrates online and offline payments for SMEs and merchants in Nigeria through its omnichannel distribution network. MFS Africa simplifies cross-border payments, integrating payments via one hub.

“We’re thrilled to partner with the MFS Africa team to expand our service offering for individuals and SMEs. We believe that we’ve barely scratched the market’s potential. Only 3% of Nigerian SMEs have access to credit products. By teaming up with MFS Africa, and with the strong support of our local commercial banking partners, we can offer more value-added products and services, such as cross-border payments, to support Nigerian SMEs in their growth,” said Degbola Abudu, Baxi CEO.

Baxi acquisition is MFS Africa’s third acquisition in five years, seeing the pan-African payments giant expand into Africa’s largest economy, where its presence to date has been limited given the country’s small number of mobile wallets. Capricorn will be called MFS Africa but its core product, Baxi, retains its name.

Both parties declined to disclose the value of the deal, however, Capricorn Founder and CEO, Degbola Abudu, in a call with TechCabal said the deal is the second-largest of its kind in Nigeria’s fintech space, behind the $200 million Stripe paid for Paystack last year.

MFS Africa was founded in 2009 by Dare Okoudjou, a Beninese national, while Nigeria-born Abudu started Capricorn in 2014, with Folu Majekodunmi. The acquisition creates a larger, more versatile company that fuses interoperability between money operators and a super-agent network reaching the mass market.

MFS Africa’s big vision is to have a presence in all 54 African countries, serving 500 million people and millions of small businesses, according to Okoudjou. He said, “if you have a phone or POS, it should be enough to transact with the rest of Africa and the world, we’re building the foremost, currency-agnostic, real-time hub for payments on the continent, to enable people to transfer money the way they can call each other.” 

Often, MFS Africa’s continental expansion plan has involved partnering with money operators and making minority investments in other fintech companies across Africa, as in the case of Julaya, Maviance, and Numida.

However, Okoudjou explains that the company opts for full acquisition when both parties consider that a more effective way to achieve their shared long-term ambitions.

“The more we spoke with Dee, the more we realised what we could achieve with a full acquisition instead of being only investors in which case there could be misaligned incentives.”

Okoudjou further explains that the need to “bolster our presence in Nigeria” given its unique market features—the prevalence of offline payment touchpoints over mobile-first transactions—drove MFS Africa’s interest in Capricorn.

“In other markets, one or two partnerships with mobile money operators could see us reach 60% of digital payment users in the country. However, mobile money isn’t that widely adopted in Nigeria. Instead, agent networks such as Capricorn’s have grown rapidly.” He says. 

For Abudu, the future of the mobile payments landscape in Africa is a game of few, where consolidation is the way forward, and attempting to scale alone would require more capital expenditure and a longer time to execute.

“It’s a good time to partner with a company that brings a real pan-African presence and we see synergies across our operations. They offer a wide range of value-added products and services like cross-border payments while we have access to SMEs in Nigeria, one of the biggest markets in Africa. We believe that we’ve barely scratched the market’s potential. The deal brings many things that allow us to grow very quickly.

“We’ve been able to build a large business with relatively small capital but now we want to be able to compete, not just in Nigeria but also across Africa, the deal with MFS Africa gives us leverage to take Baxi and the model that’s been so successful in Nigeria to other African countries.” Says Abudu

MFS Africa plans to engage with Nigeria’s central bank and other regulators to seek any other additional licenses needed to operate its full-service offerings—such as remittance, micro-lending, insurance—while also exploring commercial partnerships in the country.

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Merger and Acquisition

Flour Mills Receives Regulatory Approval for Minority Shareholder Buyout

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flour mills posts 184% increase in PAT

The Flour Mills of Nigeria Plc (FMN) has perfected plans to buy out minority shareholders to focus on strengthening its position as the future of African food businesses.

Boye Olusanya, the group managing director, stated that the company has received approval from the Nigerian Exchange Limited (NGX) and the Securities and Exchange Commission (SEC) to proceed with the purchase.

FMN disclosed on Tuesday that the buyout would be executed through a scheme of arrangement, supervised by relevant regulatory bodies.

According to Olusanya, this move aligns with FMN’s goal to become the leading Pan-African food business, improving its ability to innovate and grow, while focusing on long-term value for stakeholders.

He said the buyout would enhance FMN’s operational efficiency and decision-making agility.

The company plans to apply to the Federal High Court for approval to convene a shareholders’ meeting, where the resolution to buy out minority shareholders will be discussed.

Olusanya said the resolution would pass if at least 75% of shareholders, either in person or by proxy, approve it at the Court-Ordered Meeting (COM). FMN’s board has already recommended the offer to shareholders, citing the buyout’s potential advantages for innovation and sustainable growth.

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Merger and Acquisition

FBN Holdings Clarifies Merchant Banking Divestment, Retains Other Subsidiaries

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FBN Holdings

FBN Holdings has sought to clarify the recent divestment from its Merchant Banking business.

According to the lender, all its businesses and entities apart from the Merchant Banking business are not included in the divestment deal.

It said, “We wish to clarify that all other entities and businesses listed below are not included in the divestment, and they remain subsidiaries of FBNH and are well integrated into the Group’s strategic focus.”

The subsidiaries are FBNQuest Capital Limited, FBNQuest Asset Management Limited, FBNQuest Trustees Limited, FBNQuest Funds Limited, and FBNQuest Securities Limited.

“We reiterate that the divestment pertains solely to FBNQuest Merchant Bank Limited, with no impact on the continued operations or strategic positioning of our other subsidiaries within the Group,” the bank stated in a release signed by Adewale L.O. Arogundade, Acting Company Secretary.

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Merger and Acquisition

Aradel Energy Seals $16M Acquisition of Olo and Olo West Marginal Fields

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Aradel Holdings Plc, an indigenous energy company, has announced the successful acquisition of a 100 percent interest in the Olo and Olo West marginal fields, located in the Eastern Niger Delta, through its subsidiary, Aradel Energy Limited.

The deal, which was completed in collaboration with TotalEnergies EP Nigeria and the Nigerian National Petroleum Company Limited (NNPC), is valued at $16 million, with an additional $3.5 million in deferred and conditional payments.

The Olo and Olo West Fields were formerly part of Oil Mining Lease (OML) 58, and the acquisition marks a significant milestone in Aradel’s strategic plan for growth in Nigeria’s oil and gas sector.

The deal is a major step towards enhancing energy security and bolstering Aradel’s commitment to providing sustainable energy solutions that drive economic development.

In a statement on Thursday, Aradel confirmed that the necessary regulatory processes are underway for the issuance of the Petroleum Mining Lease (for Olo) and the Petroleum Prospecting License (for Olo West).

This will follow the payment of relevant ministerial consent fees and the completion of the field development plans within designated timelines.

Aradel’s Chief Executive Officer and Managing Director, Adegbite Falade, expressed enthusiasm over the acquisition, emphasizing its importance in advancing the company’s vision of promoting energy security in Nigeria.

“The addition of Olo and Olo West marginal fields to Aradel’s portfolio is a significant inorganic growth milestone in furtherance of our long-term strategy to provide sustainable energy solutions that support economic growth,” Falade said.

Falade also praised the collaboration between the Ministers of Petroleum Resources and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for their support throughout the acquisition process.

He acknowledged the role of NNPC and TotalEnergies in facilitating the deal, highlighting their commitment to boosting Nigeria’s oil and gas production from marginal fields.

Marginal fields are oil or gas fields that have been discovered but left unattended for a decade or more.

Their development is seen as a crucial opportunity for indigenous companies like Aradel to step in and maximize Nigeria’s untapped energy resources.

Olo and Olo West, located 80 kilometers northwest of Port Harcourt, hold considerable potential for increasing Nigeria’s oil output.

Falade noted that the acquisition aligns with Aradel’s ambition to pursue both organic and inorganic growth in the energy sector.

He reiterated that Aradel is dedicated to expanding its footprint in Nigeria’s energy industry, and this transaction reflects the company’s ongoing efforts to achieve that goal.

The acquisition is particularly significant in light of Nigeria’s ongoing push for self-sufficiency in energy production.

The government has encouraged private sector investments in marginal fields as part of its broader efforts to increase the country’s oil and gas output, reduce reliance on imports, and create job opportunities for Nigerians.

Aradel’s acquisition of the Olo and Olo West fields underscores the company’s resolve to be a key player in the country’s energy future.

As the fields move towards development and production, Aradel will be playing a critical role in advancing Nigeria’s energy sector and contributing to the nation’s overall economic stability.

The energy firm has built a reputation for its innovative and responsible approach to energy production, and the Olo and Olo West acquisition is expected to further cement Aradel’s standing in the industry.

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