Wrap Text
NT1 - Net 1 UEPS Technologies, Inc - Net1 announces acquisition of South African
third party payroll processor
Net 1 UEPS Technologies, Inc.
Registered in the state of Florida, USA
(IRS Employer Identification No. 98-0171860)
Nasdaq share code: UEPS
JSE share code: NT1
ISIN: US64107N2062
("Net1" or "the Company")
Net1 Announces Acquisition of South African Third Party Payroll Processor
Johannesburg, South Africa (February 26, 2010) - Net 1 UEPS Technologies, Inc.
("Net1" or the "Company") (NASDAQ: UEPS, JSE: 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. Net 1 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 (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 (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.
Contact Dhruv Chopra at Net1 Investor Relations at:
Telephone: +1-212-626-6675
Email: dchopra@net1.com
Johannesburg
26 February 2010
Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 26/02/2010 12:12:04 Supplied by www.sharenet.co.za
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