Lesaka Technologies Acquires Touchsides to Expand Kazang’s Presence in South Africa’s Tavern Market

Lesaka’s acquisition of Touchsides enhances Kazang’s footprint in South Africa’s tavern industry, leveraging data insights.

Lesaka Technologies, Inc. announced that it has signed a definitive agreement to acquire 100% of Touchsides (Pty) Ltd (“Touchsides”), a leading data analytics and, insights and merchant services company, from Heineken International B.V. The Touchsides and Kazang businesses are highly complementary, and the acquisition is expected to significantly expand Kazang’s footprint in the tavern industry in South Africa’s informal market.

Touchsides has an active base of over 10,000 POS terminals across South Africa’s informal licensed taverns, and processes more than 1.5 million transactions per day. The business provides platform-as-a-service (PaaS) and software-as-a-service (SaaS) solutions to licensed tavern outlets, enabling the measurement of sales activity in real-time, management of stock levels and informing commercial decisions, such as pricing and promotional offers. The data and insights gathered from these terminals carries significant value and potential to be monetized through relationships with a range of clients including fast-moving consumer goods companies, retailers, wholesalers, route-to-market suppliers, and financiers.

The licensed tavern market in South Africa consists of an estimated 45,000 establishments, is a major vertical in South Africa’s informal market and provides a real growth opportunity for Kazang.

Touchsides is an exciting acquisition target and aligns perfectly with our strategy of adding scale and broadening our service offering in our Merchant division. With its installed network and deep data and insight capabilities, we expect to have a strong platform to better understand and further penetrate South Africa’s informal markets.

We have identified multiple growth levers from this acquisition that we are ready to execute on. Operating as an independent company unaffiliated to a major beverage supplier, we see a distinct opportunity to significantly grow Touchsides’ tavern base and to monetize its real-time data. Additionally, we see opportunities for Kazang not only in providing services to Touchsides base, but also in leveraging its data monetization experience and point-of-sale expertise across our large informal merchant base outside of the tavern industry.

Steve Heilbron, Lesaka head of Merchant Division and CEO, Connect

The acquisition, funded by internal cash generation of the Group, is expected to close in March 2024 and is subject to satisfaction of customary closing conditions. As part of the acquisition, Heineken’s operating business in South Africa has agreed to a long-term renewable contract with Touchsides for access to Touchsides’ tavern data and services.

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