Patrice Motsepe-backed ARC Financial Services Holdings (ARC FSH) and Ethos Mid-Market Fund I buy South Africa’s innovative FinTech player Crossfin Technology.
ARC Investments advised shareholders today that it is part of a consortium led by the Ethos Mid-Market Fund I, which has entered into agreements to buy 100% of Crossfin Technology and commits to providing acquisition and growth capital in a R1.5 billion transaction.
ARC FSH is 50.1% owned by African Rainbow Capital Proprietary Limited and 49.9% owned by the ARC Fund, which is the vehicle holding the assets within ARC Investments, the listed entity.
As part of the deal, ARC FSH will acquire 37.33% of Crossfin, via the consortium, for a consideration of R600 million, which will assume a combination of acquisitive capital from the existing shareholders and growth capital for identified portfolio transactions.
ARC Investments said the transaction is considered a landmark deal that will see Crossfin positioned for the next phase of its growth trajectory.
“The transaction is aligned to ARC Investments’ ambition to establish an ecosystem of FinTech-related businesses.
Crossfin is one of Africa’s leading independent FinTech platforms, as measured by the volume and value of transactions processed through its platforms.
It seeks to entrench its position as a market-leading platform. It is a high-growth business operating in industries that benefit from the growing trend towards usage of digital payments over cash.
“The transaction strongly positions Crossfin to leverage new technologies as they emerge,” said ARC Investments.
The deal includes the provision of acquisition and growth capital to enable Crossfin to deliver on its vision of investing in fintech solutions in select markets on the African continent.