Johannesburg - Shares in Transaction Capital rose 3.82 percent to R6.80 yesterday on news that Actis, a global private equity firm, was to acquire Paycorp, a unit of the South African lender.

Actis said it would acquire Paycorp for R937 million, with Paycorp founder and chief executive Steven Kark and his executive team as co-investors.

Paycorp is an independent pioneer ATM deployer and by far the largest ATM company in Africa, dispensing cash from almost 5 000 machines across southern Africa.

Its other business is the installation and operation of credit and debit card terminals and the issuance of proprietary and association-branded payment cards.

Natalie Kolbe, a partner in Actis’s Johannesburg office, said: “Our commitment to Paycorp typifies Actis’s strategy: putting money to work in a high quality business, in a high-growth sector we know well. As a South African, I have seen first hand the country’s need for this type of critical social infrastructure, which can help boost financial inclusion.

“Paycorp provides broader access to transactional services for the under-banked population and we look forward to extending that even further with the business.”

Actis said its investment in Paycorp would be its fifth in the payments industry in three years. The firm, based in London, invests exclusively in emerging markets, with a growing portfolio of investments in Asia, Africa and South America.

It has $5.2 billion (R51.6bn) under management.

The agreement is subject to certain conditions precedent being fulfilled, including the approval by shareholders of Transaction Capital, financing banks and relevant regulatory authorities. It is anticipated to close by the end of December.

The transaction includes the entire issued share capital of Paycorp and its subsidiaries, ATM Solutions, DrawCard and EFTPOS.

Mark Lamberti, the chief executive of Transaction Capital, said the proposed deal was consistent with his firm’s commitment to consider disposing of a subsidiary if its performance might be enhanced by another owner, as reflected in what he and his management believed was a premium price.

He said: “The value of the transaction, which represents 21.8 times Paycorp’s earnings to September 2012, anticipates the synergies and added value that would be brought to bear by leveraging Paycorp’s assets with the acquirer’s extensive payments investments, including an Indian ATM network and other global assets.”

Kark said his core executive team had been integral to the transaction and remained unchanged. “Actis’s investment in Paycorp is a strategic development that will give us valuable alliances with other global players,” he said. - Business Report