Dual-listed Net1 has moved into healthcare transaction processing with the purchase of MediKredit Integrated Healthcare Solutions, for R74 million.
The company says the move is in anticipation of government's intention to implement a national health insurance programme, which it says will create significant opportunities for MediKredit and Net1.
The deal is expected to be wrapped up next February once it receives regulatory approval.
MediKredit is a local private company that offers transaction processing, financial and clinical risk management solutions to funders and providers of healthcare.
The US-based Net1 provides secure transaction channels between formal business and un-banked and under-banked individuals.
New markets
Net1 explains that MediKredit will give it the opportunity to expand its technology to an adjacent market and cross-sell its payment technologies.
Net1 CEO and chairman Serge Belamant says MediKredit “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 healthcare market”.
Belamant adds that the company 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”.
MediKredit has 165 staff members and provides services to about 5 000 healthcare providers, which is 90% of the market. It also serves 90 healthcare plans, which is 60% of the total market, and 12 healthcare administrators, or 65% of the market.
Last year, the company processed 60 million transactions. MediKredit also owns a global national coding system for all pharmaceutical, surgical and healthcare consumable products, the National Pharmaceutical Product Index product suite. This has become the national electronic standard for the transfer of information throughout the healthcare delivery chain in SA.
MediKredit CEO Wimpie du Plessis says: “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.”
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 universal electronic payment system platform and installed card base could offer a complete national solution when combined with the MediKredit system.
MediKredit also offers Net1 a small entry point to the US healthcare administration market through its US-based subsidiary, XeoHealth.
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