Net1 bets big on SA informal economy - CEO Chris Meyer on its R3.7bn acquisition of the Connect Group

Nasdaq and JSE-listed financial technology business Net1 Technologies announced a “transformational” deal, acquiring the Connect Group for a whopping R3.7bn. Given that Net1’s market capitalisation stands at around R6bn, the deal is significant and will broaden Net1’s exposure into the South African informal sector. The legacy-stricken business has recently had a management overhaul, with Investec corporate and investment banking veteran Chris Meyer taking the reins mid-year. Meyer outlined the thesis and rationale for the acquisition, with the deal targeting market share in the micro, small and medium enterprises merchant space. The informal economy has a large addressable market, so despite the Connect Group already serving over 40,000 merchants, there is ample room for growth. This will complement Net1’s existing business, which currently serves the more formal economy. Net1’s management overhaul along with this ground-breaking corporate activity could be an inflection point for a business that has struggled to get going over the years. Learn more about your ad choices. Visit megaphone.fm/adchoices