JOHANNESBURG, Feb. 26 /PRNewswire-FirstCall/ -- 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. 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 ( 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.