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DPO Group announced the acquisition, the fifth company the group has acquired since its inception in 2006, earlier today at a press conference in Cape Town.
Speaking at the event DPO chairman Offer Gat (pictured above, left) said the deal had been carried out through a mix of shares and cash. As part of the deal, the PayFast management team will remain key shareholders in the DPO Group.
Payfast acquisition by DPO Group is said to be largest payments transaction to have taken place in SA to date
It is not clear how much deal is worth. Apis Partners managing director Nicholas Smalle (pictured above, second from right) — whose firm funded the acquisition — described it as the largest acquisition of a payments processing company in South Africa to date.
The deal is therefore higher than the R100-million that DPO paid PayGate in a merger in 2016 (see this story).
Over 55 000 merchants
PayFast was founded in 2007 by managing director Jonathan Smit (pictured above, middle) and Andy Higgins.
At the time of its sale, the company had over 55 000 SA ecommerce merchants. The Cape Town based company claims to have the broadest range of shopping cart integrations on the continent.
In addition, PayFast’s Instant EFT service provides consumers with a secure alternative for making online payments.
DPO explained in a statement that the integration of PayFast into DPO’s services will increase the range of payment options available to DPO Group’s business customers, while providing a pan-African solution to PayFast’s existing customer base.
Following the acquisition, DPO Group will now serve over 100 000 merchants across 18 African markets.
In addition, the merger will allow all of the DPO’s services to be available on a single platform to both DPO Group and PayFast merchants significantly improving their capacity to do business not only across Africa but also around the world.
Also speaking at the press conference, DPO PayGate managing director Peter Harvey (pictured above, far right) said PayFast’s instant EFT product was very attractive to the DPO Group.
Harvey explained that while DPO PayGate already has a similar product, the merger makes DPO a dominant player in the SA market.
‘Approached many times’
Smit said PayFast had been approached many times by companies seeking to acquire the firm in the last few years. Most of these approaches had come in the last few years, following the growth of the local ecommerce sector.
He said the deal has been in the making for some time, with conversations having started in 2015.
Smit added that the market has now reached a size where “it has started to get interesting”, and that after operating for more than 10 years the founding team felt it was now “time for something”.
DPO eyes expansion in 10 countries
DPO also announced today that it is looking to expand to 10 more Africa countries, with six of these new markets in Francophone Africa. Some of the countries the firm will expand to include Senegal, Morocco, Tunisia, Egypt, South Sudan, Mozambique and Angola.
DPO Group’s acquisition of PayFast is its fifth such deal. It follow’s 2016 DPO’s R100-million merger with PayGate and DPO’s 2017 acquisition of the Botswana and Namibia operations of Virtual Card Service (VCS) (see this story).
Last year DPO consolidated the six Southern African payments services startups it has acquired into one brand, DPO PayGate — potentially creating Southern Africa’s biggest payment services providers (see this story).
Read more: Is DPO PayGate now Southern Africa’s biggest payment services provider?
Read more: DPO Group to acquire Botswana, Namibia operations of Virtual Card Service
Read more: PayGate receives R100-million in funding, merges with DPO
Featured image (left to right): DPO Group chairman Offer Gat, DPO Group CEO Eran Feinstein, PayFast MD and co-founder Jonathan Smit, Axis Partners MD Nicholas Smalle and DPO PayGate MD Peter Harvey