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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

Otedola Moves to Sell Part of Geregu Power Plc to FEDA

Afreximbank to acquire part of Geregu Power plant

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Geregu Power

Billionaire Femi Otedola-owned energy company, Geregu Power Plc is in talks with the Fund for Export Development in Africa (FEDA) for the acquisition of part of the energy company.

The company stated in a statement signed by Akinleye Olagbende, Company Secretary and made available on the Nigerian Exchange Limited (NGX).

Geregu Power hereby notifies “Nigerian Exchange Limited (the Exchange) and the investing public of its discussions with the Fund for Export Development in Africa (FEDA) for the acquisition of a portion of Geregu Power Plc shares. FEDA is the impact development arm of the Africa Export and Import Bank (Afreximbank),” the company stated.

According to the energy firm, talks are presently ongoing and “where these talks progress to a more advanced stage, the company will notify the Exchange and the investing public in line with the rules of the Exchange.”

In October, Geregu Power listed 2.5 billion shares at N100 a unit on the Main Board of the NGX. This puts the company’s market value at N250 billion and also in a better position it to raise capital to bid for Geregu II as it is presently doing.

Speaking on the listing, the Chairman, Board of Directors, Mr. Femi Otedola, CON, said “the listing of the company was the actualization of a vision to bring world-class standards in governance sustainability, and business processes to the Company and the Nigerian electricity sector.”

He added that “listing on the Main Board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders”.

Otedola is the largest shareholder in FirstBank and also holds a 99% stake in Amperion Power, the owner of the Geregu Power Plant.

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Merger and Acquisition

Access Bank Acquires Indirect Stake in Sigma Pensions

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Access bank

Access Holdings on Friday announced it has completed the acquisition of an indirect equity stake in Sigma and the merger of its subsidiary, First Guarantee Pension Limited (FGPL) with Sigma.

According to the bank, following the sanction of the Scheme of Merger between Sigma and FGPL by the Federal High Court on December 1, 2022, FGPL has been dissolved without winding up leaving Sigma as the surviving entity, according to Access Holdings.

Commenting on the transaction, Dr Herbert Wigwe, Group Chief Executive of the Corporation, said “Following the successful completion of the merger, our plan is to leverage the synergies of these entities, as well as the Corporation’s expansive distribution network, strong risk management culture and best-in-class governance standards to create a formidable pension funds administration business.”

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Merger and Acquisition

Elon Musk Completes Twitter Acquisition, Fires CEO, CFO, and Legal Adviser

Elon Musk completed Twitter’s $44 billion takeover last night, he immediately fired an executive director reported to have spearheaded Donald Trump’s suspension on Twitter.

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Twitter - Investor sking

As the world’s richest man, Elon Musk completed Twitter’s $44 billion takeover last night, he immediately fired an executive director reported to have spearheaded Donald Trump’s suspension on Twitter.

Sources revealed that Elon Musk accused Chief Executive Parag Agrawal, Chief Financial Officer (CFO) Ned Segal, and a few other top members of the microblogging platform of misleading him over the number of bots and fake accounts on the platform. 

It will be recalled that Musk had initially backed out of the acquisition deal after he alleged misrepresentation of fake accounts. 

This, therefore, led to a legal battle between Musk and Twitter Inc.

After the acquisition was completed late Thursday, Musk who is the CEO of electric vehicle manufacturing company, Tesla tweeted “The bird is freed”, subtly referring to the Twitter Logo.

With the complete takeover of Twitter, analysts and observers have expressed their expectation to see a change in the operational modality of the company. 

Similarly, the new owner, Elon Musk has also mum some changes which include the reactivation of the Former U.S President’s account which was suspended for inflammatory tweets. 

Twitter had accused Donald Trump of instigating violence with his tweet which led to the attack on U.S Capitol. 

Investors King had earlier reported that Elon Musk intends to take a number of measures which include the reactivation of Donald Trump’s Twitter account to turn the fortune of the company around. 

Before the suspension, the former president has one of the most engaging Twitter handles on the platform. 

Meanwhile, Elon Musk has set out a very ambitious transformation for his new company ‘Twitter”. He indicated that he will transform the platform into a “super app” which offers several things from money transfer to shopping and ride-hailing. 

Already, the social media giant is reportedly planning to integrate a cryptocurrency wallet that will support both the deposit and withdrawal of digital assets. 

In addition, Twitter also enables Bitcoin wallet address which allows Twitter users to attach their Bitcoin address to their profile. 

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