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Helios Investment Partners Set to Acquire Valucard

By on August 21, 2011

After its successful acquisition of a two thirds stake in Interswitch Nigeria Limited, a leading electronic transaction switching and payment processing service provider in Nigeria last year, Helios Investment Partners LLC is set to expand its reach in the Nigerian e-payment market with its planned acquisition of another major operator, Valucard Nigeria Plc.

A competent industry source, who confirmed the bid for Valucard, said negotiations were still ongoing, adding that Helios’ bid is presently at the due diligence stage.

The source, a managing director of a leading bank, said based on the explanations of the two parties to the deal, Helios’ acquisition of Vaucard is going to benefit the entire banking industry, especially now that the issue of electronic payment systems is on the front burner.

For Helios, its acquisition of Valucard after its successful takeover of Interswitch, will give Helios a firm control of the nation’s e-payment industry at a time the appetite of e-payment platforms is growing rapidly.

When asked if the bid for Valucard will not create problems having invested substantially in a rival firm, Interswitch, the bank CEO explained that the two institutions have worked together in the past.

“They compete and cooperate in some areas while they work together in certain areas,” he said.
Sources said it is not surprising that Helios is aggressively making incursions into Nigeria at this time, adding, however, that like other private equity firms, Helios’ hold on the two e-payment operators may be short-lived.

Helios, it was gathered, also wants to use Nigeria as a launch pad to make incursions into other African markets with promises of robust returns.

Valucard Nigeria Plc is a payment card industry service provider. The company is a member of Visa; owned by Visa Inc. and a consortium of leading Nigerian banks. Its major businesses are processing, and acquiring services. It also provides value-added services & solutions.

Interswitch, which sold two thirds of its investment to Helios last December, took a 60 percent stake in Uganda’s only company of the kind, Bankom Ltd amid plans for more African acquisitions.

The company is planning to use the N26 billion ($170 million) injected into it by Helios in December for expansion on the continent, Chief Executive Officer Mitchell Elegbe told Bloomberg last week.

“We are targeting acquisitions in other countries, and where we can’t acquire, we will partner with the owners,” he said.
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 Central Bank seeks to encourage more non-cash transactions in the nation’s economy.