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In landmark deal, Network buys Apis-backed DPO Group

In a landmark deal for Africa’s payments space, Network International, a leading enabler of digital commerce across the Middle East and Africa (MEA), has acquired DPO Group, a high-growth online commerce platform in Africa.

Dubai-based Network International will pay $288 million to acquire 100 percent of DPO group.

The acquisition, which will be concluded in the fourth quarter of 2020, will be financed almost entirely by a 10 percent equity placing, $50 million vendor consideration sales issued to private equity firm, Apis Partners, and co-founders consideration shares. The balance will be funded by existing debt facilities, according to a document seen by Business Day.

The acquisition will support the expansion of Network International’s presence across Africa, one of the most under penetrated and fast growing payments markets in the world.

Africa’s nascent payments space has been subject of international attention in recent years. Last month, pan-African cross-border payments gateway, MFS Africa, acquired Beyonic in an undisclosed deal.

The African digital payments market is expected to grow at 18-20 percent per annum in the next 5 years, according to data from global consulting firm, McKinsey.

While overall e-commerce penetration in Africa remains very low, there are forecasts for strong growth as the Covid-19 pandemic accelerates the transition to digital payments and help close the gap between payments digitisation on the continent and developed markets.

In a McKinsey consumer survey, 30 percent of respondents said they were increasing usage of online and mobile banking tools during the pandemic.

“This deal represents a significant milestone for the pan-African payments landscape and the customers and businesses we serve,” Eran Feinstein, CEO of DPO Group, said.

“Combining the two companies will allow us to broaden our offering for new and existing customers, significantly improving capacity for Africa’s merchants to do business not only across the continent but in the Middle East as well as globally,” Feinstein said.

Simon Haslam, Network International’s Chief Executive Officer said the London-listed firm also aired his excitement on the deal.
excited by the acquisition because it will strengthen Network’s “strategic framework by combining both of our businesses’ activities across the African market.”

“Together, we have a powerful combination to accelerate digital payments across our regions and offer a one-stop shop solution for merchants, with multiple payment acceptance methods,” Haslam said.
DPO Group is already a high growth business, with a compounded annual growth in revenue of c.40 percent from 2017-2019, according to the company.

Offer Gat, DPO Group’s Co-Founder and Chairman credited the role of Apis Partners in growing the DPO Group into one of the leading pan-African payments companies.

“We have found Apis’ financial services sector expertise invaluable as we scaled DPO from a regional player to a truly pan-African platform present in 19 countries and serving both blue chip and local merchants,” Gat said.

“Apis supported DPO throughout as we made five major acquisitions in four years, entered new markets, and launched innovative new products across the continent.

“We are looking forward to working with our new shareholder, Network International, to achieve similar success over the coming years,” Gat said.

Matteo Stefanel, Managing Partner and Apis Co-Founder backed the new leadership to continue leading the way in the African payments space.

“Eran and Offer are outstanding and visionary entrepreneurs who have built DPO into a truly world class business in a very short period of time.

“They exemplify the type of dynamic management teams Apis looks to invest in, and we are very proud to have worked with them and to have been part of the DPO journey,” Stefanel said.

Udayan Goyal, Managing Partner and Apis Co-Founder, said the initial investment by Apis in DPO was in recognition of the opportunities in the African payment space.

DPO’s “subsequent rapid growth and ultimate acquisition by Network International speaks to the enormous opportunity within payments across Africa,” Goyal said.

“We believe the combination of DPO Group with Network International will create tremendous value for both businesses as they continue to deliver world-class solutions across African markets,” Goyal said.

DPO Group will retain its executive team and employees, as it continues to expand and will drive the payments agenda of the larger group within the African continent and the Middle East.

The acquisition will also see DPO Group’s shareholders and executives become key stakeholders in Network International.

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