Interswitch Ltd., a Nigerian company that processes payments for banks in the West African nation, took a 60 percent stake in Uganda’s only company of the kind amid plans for more African acquisitions.
Lagos-based Interswitch will use the 26 billion naira ($170 million) injected into it by Helios Investment Partners LLC in December for expansion on the continent, Chief Executive Officer Mitchell Elegbe wrote in an e-mailed response to questions yesterday.
“We are targeting acquisitions in other countries, and where we can’t acquire, we will partner with the owners,” he said. Interswitch concluded the deal for the majority stake in Kampala-based Bankom Ltd. yesterday, Elegbe said. He declined to say how much was the deal was worth.
The growth plans for Interswitch, which also runs a network of 10,000 automated-teller machines and 11,000 point-of-sale terminals, come as the Nigerian central bank seeks to encourage more non-cash transactions in sub-Saharan Africa’s second-biggest economy. A cash-withdrawal limit of 150,000 naira for individuals and 1 million naira for companies will take effect in June 2012.
London-based Helios, a closely held investment company that focuses on Africa, bought into Interswitch “at a time when Nigeria is getting set for the next phase of growth in electronic payments,” said Elegbe. “We think the partnership will enhance Interswitch’s strong growth within and outside the country,” he said.
No official at Helios’s London office was available to comment on the deal, a company representative said when Bloomberg news called.
Interswitch was established by seven Nigerian banks, four of which still hold shares in the company, including First Bank of Nigeria Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc and Zenith Bank Plc, according to its website. Adlevo Capital of Mauritius and TechInvest Ltd., the holding company of Telnet Nigeria Ltd., also hold stakes.