ACTIS' Pan-Regional Payments Platform: Private Equity Buy-and-build Strategy in the Middle East and Africa

In 2010, ACTIS embarked on an ambitious project to build a pan-Middle East and Africa (MEA) payments platform. It had purchased Mediterranean Smart Cards Company (MSCC), a bankcard issuer with operations across Africa, and had identified a follow-on target, Visa Jordan Card Services (VJCS) as part of its buy-and-build strategy, and another potential acquisition in South Africa. These could enable the ACTIS platform to capture the entire value chain in the payments business in the MEA region. However, not long after the purchase of MSCC, political turmoil engulfed the Arab world, prompting the ACTIS investment committee in London to question the viability of creating a payments platform in MEA.

The case discusses the complexity and risks of investing in emerging markets, specifically “frontier markets”, which have the highest growth potential but involve the most uncertainty and risks. It enables students to understand the challenge of a goal-based investment thesis such as a buy-and-build within the context of emerging markets (i.e. Africa and the Middle East) and the options for mitigating risks.