Net 1 Announces Intention to Acquire Prism Holdings Limited
09 Februar 2006 - 8:20PM
PR Newswire (US)
JOHANNESBURG, South Africa, Feb. 9 /PRNewswire-FirstCall/ -- Net 1
UEPS Technologies, Inc. (NASDAQ:UEPS) (the "Company") announced
today that its subsidiary, Net 1 Applied Technologies South Africa
Limited ("Net 1 SA"), has submitted to the board of directors of
Prism Holdings Limited ("Prism"), a South African public company
whose shares are listed on the JSE Limited, a letter detailing Net
1 SA's proposed offer to acquire from Prism shareholders all the
issued ordinary share capital of Prism for ZAR1.02 per share, or
approximately $0.16 per share using the ZAR:$ exchange rate as of
February 8, 2006, for a total cash consideration of approximately
$100 million. Prism is a company focused on the development and
provision of secure transaction technology, solutions and services.
Prism's 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 what Prism calls the "trusted transactions"
environment and provide Prism with the building blocks for
developing secure end-to-end payment solutions. Unlike common
mergers and acquisition practice in the United States where
transactions are typically announced only after completion of due
diligence and final negotiation of definitive transaction
documentation, South African rules require public announcement of
an acquisition transaction as soon as the principal terms of the
transaction have been established. Thus, on February 9, 2006, Net 1
SA, together with Prism, made a joint announcement (the "Firm
Intention Announcement"), advising Prism's shareholders that Net 1
SA had submitted to the Prism board a notice of Net 1 SA's firm
intention to make the offer. The making of the offer, and the
consummation of the acquisition, are subject to a number of
conditions, including satisfactory completion of the Company's due
diligence, no Prism material adverse change, approval by Prism
shareholders and the receipt of South African regulatory and other
relevant approvals. There is no assurance that Net 1 SA will
ultimately make the offer or that if made, the acquisition of Prism
shares will be completed. The sending of an offer circular to
Prism's shareholders will be subject to: * the conclusion of
satisfactory arrangements relating to the treatment of Prism's
existing incentive scheme and to the incorporation of Prism
employees into the Company's employee incentive program, as
appropriate; and * the conclusion of an implementation agreement
incorporating the terms and conditions set out in the offer and
such other terms as are reasonably acceptable to the parties. Prism
shareholders, including certain Prism directors and employees,
holding approximately 43% of Prism's shares, have entered into
irrevocable undertakings to vote in favor of the offer. As required
by South African regulations, the Firm Intention Announcement and
Net 1 SA's written proposal to the Prism board contained a
statement that the Company's financial adviser, Morgan Stanley
South Africa (Proprietary) Limited ("Morgan Stanley"), had provided
confirmation to the South African Securities Regulation Panel (the
"Panel") that the Company has and will have sufficient resources
available to satisfy full acceptance of the offer. The Company has
provided to Morgan Stanley, in support of its confirmation to the
Panel, a written undertaking that, until completion of the
transaction, the Company will set aside and not use for any purpose
other than completion of the transaction, cash in the amount of
approximately ZAR700 million (approximately $113 million at the
February 8, 2006 ZAR:$ exchange rate). As of December 31, 2005, the
Company had cash and cash equivalents of approximately $183.9
million. The Company believes that without regard to this ZAR700
million, the Company's remaining cash reserves, together with cash
resources available under an overdraft facility and revolving
credit facility, will continue to be sufficient to fund the
Company's activities and expansion plans for the foreseeable
future. The Company's management believes that the acquisition of
Prism would provide the opportunity to: * augment the Company's
management team, technical staff and development professionals; *
enhance the Company's geographical penetration in South Africa via
Prism's terminals located in semi-urban stores, and thereby
strengthen the Company's merchant acquiring footprint; * expand the
Company's product lines to include services such as Prism's prepaid
water and electricity and mobile phone business; * increase the
total number of transactions the Company processes and is capable
of processing; * amplify the Company's technological advantage by
providing the Company with access to Prism's SIM card patented cell
phone technology; * expand the Company's market reach into new
geographical areas such as the Philippines, Indonesia and Malaysia
through Prism's existing operations; and * take advantage of
Prism's smart card manufacturing capabilities. About Net1
(http://www.net1ueps.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, the Company 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 card holders 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. This
announcement may contain forward-looking statements pursuant to the
"safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve a
number of risks and uncertainties, including, without limitation,
the following: * the Company may not ultimately make an offer to
the Prism shareholders or if the Company does make an offer, the
conditions to the offer may not be satisfied and the transaction
may not be completed; and * the risk that if the Company does
complete the transaction, the Company may not be successful in
expanding its product lines or operations, integrating the
operations of Prism with the Company, or otherwise achieving the
benefits the Company expects to derive from the acquisition. These
forward-looking statements are not guarantees of future performance
or events and are subject to risks and uncertainties that can cause
actual results to differ materially from the results contemplated
by such forward- looking statements. The Company undertakes no
obligation to revise any of these statements to reflect future
circumstances or the occurrence of unanticipated events. First Call
Analyst: FCMN Contact: DATASOURCE: Net 1 UEPS Technologies, Inc.
CONTACT: William Espley of Net1 Investor Relations,
+1-604-484-8750, or +1-866-412-NET1 (6381) Web site:
http://www.net1ueps.com/
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