Capitec Bank Holdings has agreed to acquire a 40% stake in online lending firm Creamfinance in a €21m deal.
Cyprus-registered Creamfinance offers online consumer loan products in Poland, Latvia, Georgia, the Czech Republic, Mexico and Denmark.
The transaction will be carried out in three tranches at nine-month intervals. The first tranche of €6.7m will offer Capitec a 19.43% holding in Creamfinance, the second tranche of €7.1m a 31.25% stake, while the third tranche of €7.2m will boost Capitec’s stake to 40%.
Existing shareholders of the online lender will also be able to exercise the option to offload a further 9% stake to Capitec at a maximum price of €5.4m. However, Capitec said it does not intend to become a controlling shareholder.
Capitec will also have the right to nominate two directors on the Creamfinance as part of the deal. The funds from the deal will be used to speed up the firm’s international expansion and launch of a full product portfolio in existing markets.
Creamfinance founders Matiss Ansviesulis and Davis Barons will maintain an interest of at least 10% each. Whirlon Investments, Basic Group and other small shareholders would own the balance of the shares.
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Capitec CEO Gerrie Fourie said: “We are impressed by Creamfinance’s focus on Smart Data scoring and its business model which was developed in such a way that new countries can be entered swiftly and efficiently, requiring limited investment in local infrastructure.”