R332m deal to move Aplitec to US

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 28 Jul 2004

Smart card payment solutions company Aplitec`s business has been sold to US company Net 1 UEPS Technologies for $52.8 million (R332.64 million).

The transaction was funded by investment house Brait and a consortium of investors including Southern Cross Capital - a private equity company that manages a fund on behalf of the Oppenheimer family - and Fleming family investment company FF&P Asset Management.

Aplitec (Net 1 Applied Technology Solutions) specialises in the development of smart card technologies for payment solutions and has received a number of provincial government contracts, particularly in the area of paying pensions. In the last financial year it lost R15 million due to delays by the Eastern Cape government in implementing its social security scheme.

Brait CEO Antony Ball says the transaction will allow the marketing of Aplitec`s smart card technologies in countries other than SA and the worldwide rights will be held by the US company.

Aplitec announced its intention to consider this move earlier this year. It would require the company to delist from the JSE, and South African and US regulatory approval would have to be obtained.

"We also wanted to ensure the transaction structure provided Aplitec shareholders the opportunity to participate in the future of the combined business and its international expansion," says Ball. "For this reason, and due to the complexity of regulations governing exchange controls and ownership of foreign shares, Aplitec shareholders were given the option to reinvest in the business through a trust structure."

Aplitec says an overwhelming majority of shareholders (99.2%) selected the reinvestment option.

Following the Aplitec recapitalisation, the Brait consortium holds approximately 33% of Net 1`s common stock on a fully diluted basis. As a result of the transactions, Aplitec delisted from the Johannesburg Stock Exchange on 1 July.

"As a result of this complex transaction, we believe we are now positioned to be able to market, sell and implement our technologies anywhere in the world," says Net 1 CEO Serge Belamant.