Net1 Announces Acquisition of South African Third Party Payroll Processor
February 26 2010 - 3:51AM
PR Newswire (US)
JOHANNESBURG, Feb. 26 /PRNewswire-FirstCall/ -- Net 1 UEPS
Technologies, Inc. ("Net1" or the "Company")
(NASDAQ:UEPSNASDAQ:JSE:NASDAQ:NT1) today announced that it has
agreed to acquire the operating business of FIHRST Management
Services (Pty) Limited ("FIHRST") for ZAR 70 million (approximately
USD 9 million) in cash. FIHRST is a South African private company
that offers a third party payroll payments solution to
approximately 1,170 companies, representing 700,000 employees with
a transaction volume of approximately R40 billion per annum. The
transaction is expected to close in April 2010 once all regulatory
approvals have been obtained. The acquisition of FIHRST will
further enhance Net1's position as one of the leading independent
transaction processors in South Africa. The Company believes that
the acquisition is strategically important for the following
reasons: -- Access to the 700,000 employees of FIHRST customers
will provide Net1 the opportunity to market its range of
transaction processing products and financial services, including
bill payments, insurance products, prepaid utilities and third
party payments to these employees. -- Net1 will have the potential
to promote its wage payment initiative by offering the employees of
FIHRST customers its banking solutions through the Company's
relationship with Grindrod Bank Limited. -- Enhancement of Net1's
technology platforms and IT development resources. Net1 and FIHRST
operate on different IT platforms, which will result in additional
resources with complementary IT skills. Net1 may also realize
IT-related cost synergies in areas such as disaster recovery and
computer maintenance and support. -- Increase in the depth and
diversity of the Net1 management team with the addition of
experienced executives. The FIHRST management team has significant
experience and relationships within the third party payment
processing industry, which is key focus area for Net1. "We are
delighted to welcome FIHRST to the Net1 family as it offers an
ideal platform to further expand our transaction processing
capabilities and provides us with a link to 700,000 employees to
offer our innovative, low cost products and services," said Dr.
Serge Belamant, Net1's Chairman and Chief Executive Officer. "We
look forward to the contribution of the highly respected FIHRST
management team to the growth of our business," he concluded. Mark
Stuckenberg, Managing Director of FIHRST, commented, "The
transaction will enable FIHRST to capitalize on the multiple
synergistic opportunities available within the broader Net1 group,
as well as its expected enhanced product and service offerings to
its corporate clients in South Africa representing approximately
700,000 employees. Additionally, Net1's global footprint affords
FIHRST the ability to access new markets to offer its unique
employer-based payment system." About Net1 (http://www.net1.com/)
Net1 provides its universal electronic payment system ("UEPS"), as
an alternative payment system for the unbanked and under-banked
populations of developing economies. The company believes that it
is the first company worldwide to implement a system that can
enable the estimated four billion people who generally have limited
or no access to a bank account to enter affordably into electronic
transactions with each other, government agencies, employers,
merchants and other financial service providers. To accomplish
this, Net1 has developed and deployed the UEPS. This system uses
secure smart cards that operate in real-time but offline, unlike
traditional payment systems offered by major banking institutions
that require immediate access through a communications network to a
centralized computer. This offline capability means that users of
Net1's system can enter into transactions at any time with other
cardholders in even the most remote areas so long as a portable
offline smart card reader is available. In addition to payments and
purchases, Net1's system can be used for banking, health care
management, international money transfers, voting and
identification. Net1 also focuses on the development and provision
of secure transaction technology, solutions and services. Its core
competencies around secure online transaction processing,
cryptography and integrated circuit card (chip/smart card)
technologies are principally applied to electronic commerce
transactions in the telecommunications, banking, retail, petroleum
and utilities market sectors. Net1 has a primary listing on the
Nasdaq and a secondary listing on the JSE Limited. About FIHRST
(http://www.fihrst.co.za/) FIHRST is a "third party payment
provider" as defined by the South African Reserve Bank and the
largest of its kind in South Africa. It was established in 1998
with the development of FIHRST Connect and primary host software.
Currently, FIHRST processes payments on behalf of approximately
1,170 companies with approximately 700,000 employees paid each
month. Its ability to process payment volumes of approximately R40
billion per annum is due to the systems, technological
infrastructure and proprietary software namely, FIHRST Connect and
Web Connect. FIHRST currently has 53 employees with offices in
Johannesburg, Cape Town, Durban and Port Elizabeth, South Africa.
Forward-Looking Statements This announcement contains
forward-looking statements that involve known and unknown risks and
uncertainties. A discussion of various factors that cause the
Company's actual results, levels of activity, performance or
achievements to differ materially from those expressed in such
forward-looking statements are included in the Company's filings
with the Securities and Exchange Commission. The Company undertakes
no obligation to revise any of these statements to reflect future
circumstances or the occurrence of unanticipated events.
DATASOURCE: Net 1 UEPS Technologies, Inc. CONTACT: Dhruv Chopra,
Net1 Investor Relations, +1-212-626-6675, Web Site:
http://www.net1.com/
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