Durban - JSE-listed financial services group Ecsponent has acquired a 10 percent stake in the fintech group MyBucks for about R263 million.
Ecsponent said the acquisition would give the group an opportunity to derive some of its income in foreign currencies as MyBucks was listed on the Frankfurt Stock Exchange.
Chief executive Terence Gregory said most of the group’s acquisitions were long-term based.
Gregory said Ecsponent was confident that the investment would return excellent results in the future. “We see our 10 percent investment in MyBucks as an opportunity to hedge ourselves against the rand as the company is based offshore,” said Gregory.
MyBucks provides state of the art, virtual banking solutions to customers around the world.
Gregory said MyBucks fitted the group’s target profile as it offered a high technology, high profit margin business, while providing significant barriers to entry.
Diversification
“The acquisition substantially bolsters the group’s equity investment arm and provides effective diversification without the need for additional infrastructure or overhead growth.”
He said Ecsponent board and shareholders backed the transaction, adding that the group would continue to operate across the three target pillars of raising capital, business credit, and listed and private equity.
Ecsponent has been seriously exploring for some acquisitions that will complement the company. “We will continue to remain on the lookout for the right acquisitions in the year ahead and we won’t hesitate to do transactions if they become available,” said Gregory.
Some of the changes that Ecsponent made was exiting the retail credit sector in SA in 2015 and paved the way for the exit in Zambia and Botswana.
Read also: Ecsponent looks back at good results
Finalising the strategic exit, the group is disposing of its 50 percent interest in Sure Choice, incorporated and operating in Botswana.
Ecsponent has also agreed to dilute its interest in Ecsponent Financial Services Zambia (EFS Zambia) from 100 percent to 25 percent, through an issue of shares by EFS Zambia to GetBucks MU.
Last week, the company said during the presentation of its interim results to end December that it would focus on the core businesses, with its proven track record in small medium enterprise funding, enterprise development and private equity investment.
In those results, the group reported an increase of 81.5 percent in revenue from continuing operations to R245 million, while operating profits from continuing operations jumped by 198.3 percent to R129.3 million.
The group has grown from an asset base of under R9 million to more than R1 billion through a combination of acquisitive and organic growth over the past six years.
Ecsponent shares closed flat at 10c on the JSE.