Exploring the rumour and benefits of a potential Moniepoint acquisition of Payday

Moniepoint may acquire Payday last valued at $20 million. If the acquisition goes through, both parties could benefit from leveraging each other's infrastructure. Here is our analysis.

Tosin Eniolorunda (Moniepoint CEO) and Favour Ori (Payday CEO)
Tosin Eniolorunda (Moniepoint CEO) and Favour Ori (Payday CEO)

Two days after Payday announced its seed round led by Moniepoint, Weetracker reported that Moniepoint wants to acquire Payday in a cash and equity deal for under $40 million. The acquisition conversations reportedly began during Payday's seed round fundraising cycle.

However, Moniepoint has denied the news of an acquisition, and Payday has declined to comment. This has dampened any premature celebration of a new exit in Nigeria's most prominent tech ecosystem, which has already seen an exit in FairMoney's acquisition of Payforce.

Despite this, the rumoured $40 million acquisition price gives us a sense of Payday's valuation cap. TechCrunch reported that the lower bound was $15 million, so we estimate Payday's value to be around $27.5 million.

What is the reason for the secrecy from both parties, and is there any truth to the acquisition rumour?

Let's dive in and find out.

There are two concerned parties to an acquisition; the buy-side (acquirer) and the sell-side (target). In this case, Moniepoint is the rumoured potential acquirer, while Payday is the considered target.

Five reasons why companies keep potential merger and acquisition news discreet

Proper management of a merger and acquisition (M&A) timing and messaging is necessary to minimise potential negative consequences for both parties involved. Here are five reasons why companies get touchy and defensive about possible acquisition news prematurely getting out:

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