Capitec has made its first move into international markets by acquiring a 40% stake in European online lender, Creamfinance, for \u20ac21 million – or R283 million.<\/p>\n
Creamfinance is an online consumer lender that has\u00a0an international footprint in Latvia (where it was founded in 2012), Poland, Czech Republic, Georgia, Denmark and Mexico.<\/p>\n
Group CEO Gerrie\u00a0Fourie said\u00a0that the strategic partnership will provide Capitec with an “opportunity to gain experience in entering and operating in foreign countries”, with a specific focus on advancing credit in the international and online environment.<\/p>\n
“It is an appropriate match. Creamfinance\u2019s online business model has been developed in such a way that new countries can be entered swiftly and efficiently, requiring limited investment in local infrastructure,” Fourie said.<\/p>\n
“Capitec\u2019s focus will be to provide strategic input and give access to skills in key areas such as information technology, credit management and the development of term loan products, thereby assisting Creamfinance to further grow its international business.”<\/p>\n
Fourie added that the transaction will also create a potential revenue source “from a diverse pool of foreign currencies”.<\/p>\n
“Consumer fintech is a high growth industry with potential to offer sustainable growth and internal capital generation,” the CEO said.<\/p>\n
Capitec released the details of the deal, which is will be done in three tranches at nine-month intervals, subject to certain performance measures being met, with a forward option to increase its holding to 49%.<\/p>\n
Existing shareholders of Creamfinance have the option to sell a further 9% shareholding to Capitec at a maximum cost of \u20ac5.4 million, which would increase\u00a0 the local bank’s interest to 49%.<\/p>\n
The option to increase its holding can\u00a0be exercised at the time of the second or third\u00a0investment tranches, Capitec said, but remains subject to Creamfinance meeting the performance measures for the relevant tranches.<\/p>\n
“It is not the intention for Capitec to become a controlling shareholder,” the group said.<\/p>\n
The two Creamfinance founders will each maintain an interest of at least 10% in their company. The balance of the shares is held by Whirlon Investments Limited, Basic Group Limited and other small shareholders.<\/p>\n
Capitec will initially have the right to nominate one director on the board of Creamfinance.<\/p>\n
This position will be held by Andr\u00e9 du Plessis, CFO of Capitec. This will be increased to two after the second investment tranche, which position will be filled by\u00a0Fourie, Capitec said.<\/p>\n