Araxi (AXX) investor relations material

Deal rationale and strategic fit

• Acquisition strengthens the platform with a leading, scalable payment processing business, enhancing reach and capabilities in both physical and digital payments.

• The deal aligns with a strategy to build a scale business with strong product/market fit and differentiated offerings, supporting financial inclusion and innovation in e-commerce, SaaS, and BaaS.

• Pay@'s established network, enterprise client base, and technology provide a defensible market position and enable cross-selling and expansion opportunities.

• Regional and international growth is supported by Pay@'s presence in multiple African countries and complementary platforms.

• The deal creates a powerful payments ecosystem, leveraging both companies' strengths for accelerated growth.

Financial terms and conditions

• Araxi acquires 80% of Pay@ for ZAR 1 billion, funded by ZAR 200 million in cash and ZAR 800 million in bank or senior debt.

• Debt is competitively priced, well below 9%, with a 5-year amortization and tax-deductible interest.

• Transaction expected to be accretive to earnings in the first year, with improved EPS and ROE.

• Pro-forma FY25 revenue for the combined group exceeds R1.52bn, with EBITDA up ~40% to R465m and margin rising to ~31%.

• Net debt to EBITDA post-acquisition will be below 1.2x, considered modest and leaves room for further acquisitions.

Synergies and expected cost savings

• Significant cross-collaboration opportunities between Araxi's software and payments divisions and Pay@, enabling cross-selling and new SaaS opportunities.

• Araxi's software capabilities, including AI-based fraud detection and cloud expertise, will be leveraged within Pay@.

• Integration will enable expanded reach in new industries and markets, and drive product innovation.

• Potential for margin expansion through efficiency improvements and revenue mix shift.