Bank and enterprise payment solutions company Araxi has announced that it will acquire business-to-business payments solutions company Pay@ Group for R1-billion.

The proposed acquisition is expected to enhance Araxi Group’s payments capabilities significantly and enable it to deliver an expanded and more competitive offering to its enterprise clients across South Africa.

Pay@’s service offering is highly complementary to Araxi’s payments division, with almost no overlap. In addition, the acquisition is anticipated to unlock meaningful regional growth opportunities across Africa and other international markets, says Araxi CE Bradley Sacks.

The combined company will create a seamless platform that supports faster innovation, broader solutions and greater long-term value.

Pay@ is the largest independent payments processing platform in South Africa and has more than 9 000 retailer locations, more than 150 000 mobile point-of-sale payment points and 15 digital payment platforms for banks, telecommunications companies, voucher providers and financial technology companies.

The company provides integrated business-to-business payments solutions and has business-to-consumer capabilities. It serves a range of enterprises and small and medium-sized enterprises, including, pay TV, money remittance, financing, insurance and public sector organisations in Botswana, Eswatini, Lesotho, Namibia, South Africa and Zimbabwe.

Its secure, efficient multi-product platform seamlessly consolidates a range of payment options into a single solution and boasts a 99.99% efficacy rate. Pay@ processed more than R60-billion in transaction value over the past 12 months, with a compound annual revenue growth of 22% in the past three years, Araxi says.

Additionally, Pay@’s business model demonstrates strong profitability and impressive operating leverage.

During the financial year to February 28, 2025, Pay@ generated revenue of R271.2-million, up 26.5% year-on-year; earnings before interest, taxes, depreciation and amortisation of R130.2-million, up 30.3% on the prior year; and net profit of R91.3-million, up 34.2% year-on-year.

The 19-year-old Pay@ has no third-party, interest-bearing debt on its balance sheet and has grown organically to date, based solely on its internal profitability and cash generation.

Further, an accomplished management team leads Pay@ with a differentiated product offering that has scope to grow in both existing and international markets.

Its management team is committed to remaining with the company after the acquisition and partnering with Araxi to expand the platform geographically and through new, diversified and improved services.

Pay@ has a range of new solutions in the process of being introduced, with opportunities to expand into e-commerce, software-as-a-service and other areas of funds transfer. The solutions and innovations developed by the Araxi group companies complement these initiatives.

They should accelerate product introduction, enhance customer value and satisfaction, and further improve the Pay@ Group’s profitability, Araxi says.

Further, the purchase consideration of R1-billion will be settled in cash, comprising R200-million from Araxi Group's existing cash reserves and R800-million of senior debt already committed.

Araxi Group does not at present have any material interest-bearing third-party debt. Gearing levels post-completion of the proposed transaction will be relatively modest and comfortably serviced by operational cash flows.

The transaction will require shareholder approval under the JSE Listings Requirements. A circular will be distributed to Araxi shareholders in due course.

“This transaction unites two leading participants operating in different areas of the South African payments ecosystem. By leveraging our complementary strengths, we will deliver a powerful, end-to-end fintech proposition for clients and unlock significant value for stakeholders,” says Sacks.

“We are excited to combine our extensive platform and experience with Araxi’s deep tech skills and digital and cloud expertise. Araxi has proven its bone fides in the areas in which it operates and will provide Pay@ with strategic support to fuel our continued growth,” says Pay@ CE Andrew Hardie.

“We both have longstanding banking and corporate relationships and this transaction presents an opportunity to build on those. Our new relationship with Araxi also presents Pay@ with unique opportunities and opens new horizons to deliver significant value for our partners, clients, shareholders, and employees,” he says.