Network International Holdings Plc Proposed Acquisition Of DPO Accelerating Growth In Africa

  • Through Online Payments And Mobile Money

By Celestine Okorie

 Network International Holdings plc, the leading enabler of digital commerce across the Middle East and Africa  has announced that it has entered into an agreement to acquire DPO Group, the leading, high-growth online commerce platform in Africa, for a total consideration of approximately US$288 million. The consideration will be almost entirely funded through the proceeds from an equity placing representing 10.0 per cent of the Company’s existing issued share capital, US$50 million vendor consideration shares issued to Apis Growth Fund I, managed by Apis Partners, US$13 million consideration shares issued to the DPO co-founders, with any small remaining balance to be funded via existing debt facilities.

DPO is the largest online commerce platform operating at scale across Africa.  Here are a few statistics:

Rapid growth profile with revenue CAGR of c.40 per cent from 2017-2019 and Total Processed Volume (“TPV”) CAGR of c.30 per cent from 2017-2019. Revenues of US$16 million in 2019

Leading e-commerce and mobile money services for >47,000 merchants across high quality brands

Present in 19 countries across Africa with South Africa, Kenya and Tanzania representing major markets. Multiple distribution channels with on the ground presence to recruit merchants, combined with direct connectivity to acquiring banks

Strong strategic fit and growth accelerator for Network International

Market: consolidates and accelerates our presence in Africa, the most underpenetrated and fast growing payments market in the world. Africa expected to represent c.40 per cent of Network International total revenue by 2024 (27% in 2019), giving us an evenly balanced business in Africa across Merchant and Issuer Solutions

Distribution and relationships: brings direct merchant and Mobile Network Operator (“MNO”) relationships, broadening our business in Africa across the entire payments value chain

Capabilities and innovation: widens our capabilities and exposure in fast growing online payments and mobile money, enabling merchants to accept a wide range of payments methods

Cross selling opportunities: combined incremental capabilities and solutions provide significant cross-sell opportunities to both Network International and DPO customers

Disciplined capital allocation: acquisition expected to be broadly EPS neutral in 2022, including integration costs. Double digit ROCE within 3-4 years, and significantly higher thereafter

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