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Newest billionaire in town? KCB gets nod to acquire Nick Mwendwa firm
Former FKF president Nick Mwendwa.
Nick Mwendwa is well on his way to becoming the newest member of the billionaires’ club after the competition regulator approved a deal that will see KCB Group acquire a controlling stake in his fintech firm.
The Competition Authority of Kenya (CAK) has approved a deal for the former Football Kenya Federation (FKF) president to sell a 75 percent stake in his Riverbank Solutions to the lender. Some insiders estimate that the deal is valued at Sh2 billion.
The approval is on condition that existing contracts with customers and merchants Riverbank Solutions are honoured. CAK also insisted that the firm's third party customer data is not used by the lender for anything other than the fintech's operations.
"The acquirer shall ensure that all third-party transactional, customer, or merchant data collected or processed through the target’s infrastructure, networks, or platforms remain ring-fenced and are not shared, accessed, or utilised by the acquirer for purposes other than those strictly necessary for the operation of the target," a statement from the regulator said.
The approval was granted after finding that the proposed merger is "unlikely to prevent or lessen competition in the market for agency banking".
"This transaction presents a vertical overlap of commercial activities, given that two entities operating at different levels of the supply chain are merging," CAK said.
"Riverbank operates in the upstream market by developing and supplying infrastructure and software solutions for digital payment processing and related financial transactions. Whereas Riverbank does not serve end-users directly, it collaborates with licensed entities, such as KCB Group, in the downstream market to deliver services to consumers. Specifically, the Riverbank’s solutions are integrated into the acquirer's core banking system to support agency banking."
Mwendwa founded Riverbank Solutions 15 years ago. It's business model is focused on revenue collection partnerships with county governments, including Kisumu and Migori. It also provides payment solutions for other sector like banking, micro-finance, manufacturing, retail, and the military.
Last year, KCB boss Paul Russo indicated that the acquisition was strategic and aimed at growing the lender's footprint in the digital payments space.
“Riverbank is not new to us as they have been providing us with Agency Banking Solutions since 2013. Additionally, we see true value in the Zed 360 platform under which we expect to step up the delivery of our value proposition to MSMEs and SMEs as well as in harnessing the ecosystem banking.”
The deal is also awaiting approval from the Central Bank of Kenya.
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Additional report by Dominic Omondi
