Net 1 UEPS Technologies, a financial technology company with operations in Africa, Asia, and Europe, announced it has signed a definitive agreement to acquire 100% of its South African-based competitor Connect Group. Net 1 acquired Connect for R3.7 billion, or $242 million.

The deal reinforces the buyer's ambition to become the leader in the fintech sector in South Africa. It is expected to close in the first quarter of 2022, pending regulatory approval and satisfaction of customary closing conditions. Chris Meyer, CEO of Net1 Group, said the transaction allows his company to expand its customer base of SMEs.

To finance this deal, Net1 will use several types of mechanisms, including debt, the issuance of new shares, and cash offsets. The company realizes a potential positive capital gain on the deal, as Connect Group is valued at $315.3 million.

This is the seventh acquisition announcement involving a financial technology company active in Africa this year, according to data available on Crunchbase. Data also showed that 2021 was a record year for fintech acquisitions since 2002.