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.

• Pay@'s established network, technology, and enterprise client base provide a defensible moat, significant network effects, and cross-selling opportunities.

• The deal aligns with goals for financial inclusion, innovation in e-commerce, SaaS, and BaaS, and positions the group for regional and international growth.

• Complementary fit with existing software and payments divisions, enabling cross-collaboration, technology integration, and a powerful payments ecosystem.

• Pay@'s enterprise focus and cash-generative model reduce risk and support sustainable growth.

Financial terms and conditions

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

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

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

• Net debt to EBITDA post-acquisition will be below 1.2x, maintaining moderate leverage and capacity for further acquisitions.

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

Synergies and expected cost savings

• Significant opportunities for cross-collaboration, cross-selling, and new SaaS offerings between software and payments divisions.

• Integration of data analytics and technology skills to deliver incremental value and product innovation.

• Potential for margin expansion and efficiency improvements through internal capabilities and expanded service offerings.

• Pay@'s digital aspirations will be supported by Araxi's cloud and software expertise.