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Network International Holdings plc to acquire DPO Group

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WED, JULY 29 2020-theG&BJournal– Network International Holdings plc, the leading enabler of digital commerce across the Middle East and Africa (MEA), has struck an acquisition deal with a potential value of USD288 million for DPO Group, the leading, high-growth online commerce platform in Africa, demonstrating the UAE based company’s focus to consolidates and accelerates its presence in Africa, the fast growing payments market in the world.

The company said today ‘’the consideration will be almost entirely funded through the proceeds from an equity placing representing 10.0% of the Company’s existing issued share capital, USD50 million vendor consideration shares issued to Apis Growth Fund I, managed by Apis Partners (Apis), USD13 million consideration shares issued to the DPO co-founders, with any small remaining balance to be funded via existing debt facilities.’’

Completion of the Transaction is expected in Q4 2020, subject to customary closing conditions including regulatory and anti-trust. The acquisition is to be broadly EPS neutral in 2022, including integration costs. It also envisages double digit ROCE within 3-4 years, and significantly higher thereafter.

Simon Haslam, Chief Executive Officer, commented: “We are excited by the proposed acquisition of DPO, the leading high-growth online commerce platform operating at scale across Africa.’’

He said Africa is a vast and diverse continent, representing the world’s most underpenetrated, nascent and fast growing payments markets, ‘’where we have seen recent signs of an acceleration in those trends.’’

‘’DPO will further consolidate our presence in Africa, strengthen our position across the entire payments value chain and accelerate our growth,’’ Haslam said, adding that ‘’this acquisition will widen our capabilities across online, mobile and alternative payments; bring an extensive and diverse range of direct merchant relationships to our business; and provide a wider range of solutions for our existing customers.’’

DPO is the largest online commerce platform operating at scale across Africa with rapid growth profile and revenues of USD16 million in 2019. Its e-commerce and mobile money services span 47,000 clients across high quality brands in 19 countries across Africa with South Africa, Kenya and Tanzania representing major markets.

DPO has seen strong current trading, following Covid-19 lockdowns. Digital and online payments market in Africa is expected to grow at 19% CAGR over the next five years and Covid-19 is expected to accelerate this growth.

E-commerce penetration in Africa is 0.3% of private consumption, versus c.5% in the United Kingdom and c.17% in China. Total Payment Volume (TPV) growth year-on-year was 27% in May (57% in constant FX) and 27% in June (49% in constant FX).

The stringent lockdowns in DPO’s main market of South Africa during April did not seem to deter its growth trajectory. In June 2020, DPO signed c.4,400 merchants, an all-time high.

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