Net 1 UEPS Technologies Inc. ("Net1" or the "Company") (NASDAQ:
UEPS)(JSE: NT1) today announced that it has agreed to acquire 100%
of MediKredit Integrated Healthcare Solutions (Pty) Ltd
("MediKredit") for ZAR 74 million (approximately USD 10 million) in
cash. MediKredit is a South African private company that offers
transaction processing, financial and clinical risk management
solutions to both funders and providers of healthcare. The
transaction is expected to close in February 2010 when all
regulatory approvals have been obtained.
MediKredit will provide Net1 the opportunity to expand Net1's
technology to another adjacent market and to cross-sell its payment
technologies. Management believes that the acquisition is
strategically important for the following reasons:
- MediKredit expands Net1's position as the leading independent
transaction processor in South Africa. Net1's market leadership in
the merchant processing space (through EasyPay) in South Africa
will be complemented by the acquisition of the South African market
leader in the healthcare transaction processing space. Management
believes that the South African government's stated intention to
implement a national health insurance program will create
significant opportunities going forward for MediKredit and Net1.
MediKredit has 165 employees and provides its services to
approximately 5,000 health care providers in South Africa (90% of
total market size), 90 healthcare plans (60% of total market size),
12 healthcare administrators (65% of total market size) and
processed 60 million transactions during 2008. MediKredit also owns
a globally unique national coding system for all pharmaceutical,
surgical and healthcare consumable products, the National
Pharmaceutical Product Index ("NAPPI") product suite, which has
become the national electronic standard for the transfer of
information throughout the healthcare delivery chain in South
Africa.
- The acquisition will expand Net1's offering in some of its
existing markets like Ghana and Nigeria, where national health
insurance schemes have been introduced and where the UEPS platform
and installed card base could offer a complete national solution
when combined with the MediKredit system.
- MediKredit offers Net1 a small, strategic entry point for the
US healthcare administration market. The rapidly changing US
healthcare and administration industry provides a significant
opportunity for the introduction of MediKredit's technology.
MediKredit's wholly owned subsidiary in the USA, XeoHealth
Corporation, recently launched its proven Real Time Adjudication
rules engine for the health care industry in the USA.
- Enhancement of Net1's technology platforms and IT development
resources. Net1 and MediKredit both operate similar back-end
systems, which require skilled developers and technicians. The
addition of MediKredit would significantly broaden Net1's base of
qualified development employees.
- Increase in the depth and diversity of the Net1 management
team with the addition of experienced executives. The MediKredit
management team has significant experience in the healthcare
industry, which has always been a key focus area and potential
market entry point for Net1.
"We are delighted to welcome MediKredit to the Net1 family as it
presents us with the ideal platform to expand our transaction
processing capabilities and provide an entry point for our
technology in the rapidly growing global health care market," said
Dr. Serge Belamant, Net1's Chairman and Chief Executive Officer.
"We can now provide a turnkey solution to healthcare providers,
funders and governments that encompasses transaction processing,
rule administration and payment for their members and citizens. We
look forward to the contribution of the highly respected MediKredit
management team to the growth of our business."
Wimpie du Plessis, CEO of MediKredit, commented: "The synergies
to be derived from combining Net1's payments processing expertise
with MediKredit's claims management solutions should lead to
exciting innovation possibilities within the South African
healthcare environment. Furthermore, being part of a NASDAQ listed
company will provide XeoHealth Corporation with a significant
platform to make available our innovative claims adjudication
solutions for the US healthcare market and the other international
markets that Net1 currently operates in."
About Net1 (www.net1.com)
Net1 provides its universal electronic payment system, or 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. These technologies form the
cornerstones of the "trusted transactions" environment of Prism, a
South African based subsidiary of the company, and provide the
Company with the building blocks for developing secure end-to-end
payment solutions.
About MediKredit (www.medikredit.co.za)
MediKredit is a privately held South African information
technology company based in Johannesburg. The company established
its footprint in healthcare as far back as 1941 and is one of the
pioneers that changed the face of healthcare claims processing by
moving from a paper-based environment to EDI, where medical claims
are received electronically in a realtime environment. MediKredit
has developed and commercialized a suite of software applications
and processing services that enable on-line real-time claims
adjudication and processing of medical claims for healthcare
plans.
Private healthcare in South Africa is moving towards the
empowerment of patients by enabling them to take ownership of the
financial and clinical management of their healthcare plans. This
has necessitated the need for the implementation of managed
healthcare principles, medical savings accounts and member
co-payments, where appropriate. MediKredit is uniquely positioned
to take advantage of this significant shift in the provision of
healthcare by providing on-line real-time processing and automated
claims adjudication processes.
MediKredit offers financial and clinical risk management
solutions to both healthcare plans and providers. On-line real-time
adjudication of medical claims allows patients and healthcare
providers to have immediate and accurate information on the
financial and clinical impacts of, and payment responsibilities,
for healthcare services and products. The company's copyrighted
software allows for real-time claim adjudication involving the
submission of an EDI claim and receipt of a response with the
adjudication details within seconds. The MediKredit system allows
for real-time messaging with an immediate response to an enquiry
within a single, synchronous communication session.
The MediKredit System is compatible with any system and protocol
and is able to receive and exchange data with most operating
systems. MediKredit is able to manage transactions from all
healthcare providers ensuring consistent application of health care
plan rules and benefits.
MediKredit's internally developed intellectual property is
centered on unique processes and expertise in real-time claims
adjudication and processing, which have been developed and utilized
in real-time environments for over 10 years. These processes are
also backed by a set of international quality management system
standards and guidelines (ISO 9001:2000).
Forward-Looking Statements
This announcement contains forward-looking statements that
involve known and unknown risks and uncertainties. A discussion of
various factors that could 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.
Contacts: Net1 UEPS Technologies Inc. Dhruv Chopra Investor
Relations +1-212-626-6675 dchopra@net1.com www.net1.com
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