Net 1 UEPS Technologies Inc.

Net 1 UEPS Technologies Inc.

November 23, 2009 16:15 ET

Net1 Announces Acquisition of MediKredit Integrated Healthcare Solutions

JOHANNESBURG, SOUTH AFRICA--(Marketwire – Nov. 23, 2009) - 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 (

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 (

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.

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