Araxi’s R1 Billion Pay@ Takeover: How One Deal Is Redrawing the Map of South Africa’s Payments Industry

In a market long defined by fragmentation, consolidation has arrived with a R1 billion price tag. JSE-listed fintech group Araxi — known until October 2025 as Capital Appreciation Limited — has entered into binding agreements to acquire 80% of Pay At Holdings (Proprietary) Limited and its affiliate International Payment Holdings Limited (IPHL) for a combined consideration of R1 billion, or approximately USD 62.3 million. The transaction, executed through Araxi’s wholly-owned subsidiary African Resonance, brings together two of South Africa’s most prominent independent payments operators in a deal that analysts are already describing as a defining moment in the country’s fintech consolidation story.

The announcement, made on February 19, 2026, comes at a time when South Africa’s broader fintech sector is at an inflection point. Card transaction volumes hit R2.9 trillion in 2025, growing at over 10% annually, while the country’s overall fintech market — valued at USD 1.14 billion in 2025 — is projected to nearly quadruple to USD 4.29 billion by 2034. Against that backdrop, this deal is more than a corporate transaction. It is a calculated bet on who gets to own the infrastructure of Southern Africa’s digital payments future.

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From Capital Appreciation to Araxi: A Company in Reinvention

To understand the significance of the Pay@ acquisition, it helps to understand the entity making it. Araxi began life as a Special Purpose Acquisition Company that listed on the JSE’s Main Board in October 2015, raising R1 billion through a private placement of shares. From those origins as a blank-cheque vehicle, it assembled a fintech portfolio through successive acquisitions — including Dashpay in 2017 — and built operating businesses spanning payment infrastructure, software consulting, and international expansion.

By March 2024, the company crossed a milestone: revenue exceeding R1 billion for the first time. That commercial coming-of-age set the stage for a more ambitious rebranding. In September 2025, shareholders approved a name change, and by October 2025, Capital Appreciation officially became Araxi Limited, trading on the JSE under the ticker AXX. The name, derived from the ancient Greek word for “river,” was chosen to evoke constant forward motion — a fitting metaphor for a company that has consistently grown by acquiring and integrating complementary fintech businesses. Araxi is currently valued at approximately R2.49 billion on the JSE, with its payments division serving as the engine of group profitability.

In December 2025, following its interim results release, Araxi issued a cautionary announcement signalling a possible acquisition in the payments space. The market speculated. Financial Mail noted at the time that payment businesses command earnings multiples of 20 to 50 internationally, compared with Araxi’s then-multiple of between 9 and 10.5 — suggesting the company was significantly undervalued relative to global peers. The Pay@ deal is Araxi’s answer to that valuation gap: acquire a high-growth, highly profitable platform, deepen the payments moat, and reset the group’s earnings trajectory.

Pay@: Nineteen Years of Organic Growth, Zero External Debt

The target company is no start-up. Founded in 2007 by Johan Koornhof, Pay@ has spent nearly two decades building what it describes as the largest independent payments processing platform in South Africa. Its network spans more than 9,000 retailer locations and over 150,000 mobile point-of-sale payment endpoints. The platform integrates with more than 15 digital payment systems, including banks, telcos, voucher providers, and fintechs, and boasts a 99.99% platform efficacy rate — a figure that speaks to the reliability demanded by enterprise clients operating at scale.

Over the past 12 months, Pay@ processed more than R60 billion in transaction value, with compound annual revenue growth of 22% over the past three years. For the 12 months ended February 28, 2025, the company delivered revenue of R271.2 million — up 26.5% year-on-year. EBITDA came in at R130.2 million, a 30.3% increase, reflecting strong operating leverage. Headline earnings reached R91.3 million, up 34.2%. These are not the numbers of a business that has been artificially inflated ahead of a sale. They reflect a company that has grown entirely through internal cash generation, carrying no third-party interest-bearing debt on its balance sheet at any point in its 19-year history.

Pay@ is a B2B-first platform. Its customers include enterprises and SMEs across pay television, remittances, consumer financing, insurance, and the public sector. Geographically, the business already extends beyond South Africa’s borders — operating in Namibia, Botswana, Zimbabwe, Eswatini, and Lesotho. That existing regional footprint is central to Araxi’s growth thesis: the acquisition does not merely add scale in South Africa, it provides a ready-made Southern African platform for expansion.

One additional dimension adds strategic colour to the deal. According to ITWeb’s reporting, 40% of Pay@’s current shares are held by a US private equity firm. The acquisition will bring Pay@ into full South African ownership — a point Araxi highlighted explicitly, noting that it will reduce exposure to currency volatility, ensure profits are reinvested locally, and simplify the shareholder structure. In an environment where South African businesses increasingly emphasise local economic contribution, full domestic ownership carries both commercial and reputational value.

Deal Structure: Leveraged, But Manageable

The R1 billion purchase price will be settled entirely in cash, structured in two components. R200 million will come from Araxi’s existing cash reserves, with the remaining R800 million funded through senior debt that has already been committed by lenders. Of the total consideration, R975 million flows to Pay@ with R25 million allocated to IPHL. Araxi has confirmed that it currently carries no material third-party interest-bearing debt, meaning post-transaction gearing will start from a clean base. Management has indicated that leverage levels post-completion are expected to remain modest and comfortably serviceable through operational cash flows — a projection supported by Pay@’s track record of strong and consistent cash generation.

On a pro-forma basis for the year ended March 31, 2025, the combined group’s revenue exceeds R1.52 billion — a significant step-change from Araxi’s standalone position. The transaction qualifies as a Category 1 acquisition under JSE Listings Requirements and will therefore require shareholder approval. A circular will be distributed to shareholders in due course, with the Competition Commission also required to give its blessing before the deal can close.

The remaining 20% of Pay@ will stay with two accomplished business leaders based in Stellenbosch, who will continue as directors of Pay@. This structure ensures continuity of leadership and keeps the founding management’s interests aligned with the long-term success of the combined entity. Araxi CEO Bradley Sacks confirmed in a CNBC Africa interview that Pay@’s management team has committed to remaining with the business post-acquisition — a critical assurance given that payments platforms, more than most technology businesses, run on deep client relationships and institutional trust.

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No Overlap, Maximum Complementarity

Perhaps the most important feature of the deal — and the one most likely to determine its ultimate success — is the near-total absence of product overlap between the two businesses. Araxi’s existing payments division, anchored by African Resonance and Dashpay, operates across payment terminal management, device fleet solutions, and digital gateway services for financial institutions and retailers. Pay@, by contrast, operates a multi-party, multi-product B2B transacting platform focused on aggregating payment options for enterprises, telcos, and public sector clients.

The two businesses serve similar institutional client bases but through fundamentally different channels and product sets. That distinction creates cross-selling potential without cannibalisation — arguably the ideal architecture for an acquisition in a mature market. “This transaction unites two leading participants operating in different areas of the South African payments ecosystem,” Sacks said. “With no overlapping products, Araxi and Pay@ together create a seamless platform that supports faster innovation, broader solutions, and greater long-term value.”

Araxi’s existing technology capabilities in cloud solutions, AI implementation, and software development — delivered through its Synthesis division — are expected to accelerate Pay@’s product development pipeline, particularly around e-commerce enablement, Software-as-a-Service models, and broader funds transfer innovations that Pay@ has already identified as near-term growth vectors. The deal also positions the combined entity to compete more aggressively for large enterprise mandates that require end-to-end payment capability — from physical POS infrastructure through to digital settlement and reconciliation.

The Bigger Picture: Africa’s Consolidation Wave

Araxi and Pay@ are not operating in isolation. The deal is part of a broader and accelerating wave of M&A activity across African fintech that is reshaping market structure continent-wide. As TechCabal documented in January 2026, acquiring scale and regulatory approvals across markets is increasingly proving to be a more efficient route to growth than building from scratch — particularly as Africa’s payments landscape matures from rapid user acquisition toward infrastructure ownership and margin optimisation. Paystack’s acquisition of Ladder Microfinance Bank in Nigeria and Moniepoint’s proposed purchase of Sumac Microfinance Bank in Kenya are examples of the same logic playing out at different points in the value chain.

South Africa is at the centre of this dynamic. The country accounts for the largest share of Africa’s financial services revenues — approximately 40% of the continent’s total, according to McKinsey — and its payments ecosystem is sophisticated enough to generate the kind of profitable, scalable businesses that make compelling acquisition targets. At the same time, the market remains fragmented at the infrastructure layer, with multiple independent platforms serving overlapping client bases. The Araxi-Pay@ combination directly addresses that fragmentation, creating a vertically integrated payments operator with the physical network, digital channels, and software capabilities to serve the full enterprise payments stack.

The regulatory environment is also evolving in ways that reward scale. South Africa’s Payments Ecosystem Modernisation Programme, advanced through policy papers published by National Treasury in July 2025, is designed to enable greater participation by non-banks in the national payment system. Larger, better-capitalised platforms with proven compliance track records are likely to benefit disproportionately from that opening. The anticipated finalisation of the Conduct of Financial Institutions (COFI) Bill adds further regulatory complexity that smaller operators will struggle to absorb alone — another structural driver of consolidation.

Regional Ambitions and the Road Ahead

Araxi has been explicit that this acquisition is not the end of its ambitions — it is the foundation for a more aggressive next phase. In his CNBC Africa interview, CEO Bradley Sacks revealed that Araxi’s acquisition strategy allows for future transactions up to R2 billion, maintaining fiscal prudence while leaving the door open for further consolidation. The company has consistently stated that it looks for acquisition targets with enterprise or institutional client bases, asset-light business models, strong cash generation, and technologies with meaningful cross-border scalability.

Pay@ ticks every one of those boxes, and its existing presence across five Southern African markets — Namibia, Botswana, Zimbabwe, Eswatini, and Lesotho — gives Araxi a springboard for geographic expansion that would have taken years to build organically. Africa’s digital payments market is projected to exceed $40 billion by 2026, driven by a young, mobile-first population and accelerating e-commerce adoption. The continent has more than 500 million active mobile money accounts, and the structural shift from cash-based to digital transactions — still at an early stage across most of Sub-Saharan Africa — represents an enormous long-term growth runway for scaled payment infrastructure operators.

For Araxi, the Pay@ deal crystallises a strategy that has been building since its SPAC listing a decade ago: use capital discipline and complementary acquisitions to build a fintech group that is large enough to attract institutional interest, profitable enough to fund its own growth, and regionally diversified enough to reduce dependence on any single market. Whether the company eventually pursues an international listing — a possibility that Financial Mail’s analysts floated in December 2025, noting that global payment businesses command multiples of 20 to 50 times earnings — will depend on how successfully it integrates Pay@ and delivers on the combined group’s growth potential.

What is not in doubt is that the South African payments landscape has just changed materially. Two of the country’s most capable independent fintech platforms have chosen to merge their strengths rather than compete for the same enterprise mandates. The resulting entity — with R60 billion in annual transaction throughput, over 150,000 mobile POS endpoints, and a technology stack that bridges physical and digital payments — is positioned to be a defining player in Southern Africa’s financial infrastructure for years to come. The R1 billion question is not whether this deal makes strategic sense. It clearly does. The question is how far Araxi can take it.

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By: Montel Kamau

Serrari Financial Analyst

20th February, 2026