NetSol International, Inc. Acquires Abraxas Software Pty. Ltd.
6 January 2000
NetSol International, Inc. Acquires Abraxas Software Pty. Ltd. -- Australia's Largest Provider of Automotive Finance and Insurance Software
CALABASAS, Calif.--Jan. 6, 2000--NetSol International, Inc., today announced it has acquired 100 percent of the outstanding shares of Abraxas Software Pty. Ltd., Australia's largest provider of automotive finance and insurance software, in exchange for 150,000 shares of NetSol's restricted common stock. As a result of the merger, NetSol has formed a new company called NetSol-Abraxas, Australia, headquartered in South Australia.This latest acquisition opens an entirely new and valuable market for NetSol's products and services and establishes important new partnerships with Fortune 500 customers including BMW Finance, Volvo Finance, Mercedes-Benz Finance, St. George Bank, Land Rover Finance and GMAC Leasing. Abraxas has a well-established presence in South Australia's Technology Park, which gives NetSol a firm footing in the developing Asia Pacific economic region. Australia is ideally situated to service this region and with NetSol's extensive global infrastructure and resources, the new company will enjoy substantial economies of scale to leverage new business and gain market share.
Price has been the major barrier to entry in countries such as Thailand, Philippines, Indonesia and Malaysia. In the past, these countries have had the advantage of low labor costs and a highly skilled work force. NetSol believes its development costs will challenge these barriers and undercut the region's most cost-effective producer, Thailand, without compromising profit margins.
NetSol-Abraxas, Australia will continue to provide systems maintenance and services to all of Abraxas' existing clients. The company will begin an integrated marketing program to introduce new products and services from NetSol's Lease and Finance Suite, including its POS and POSIWEB asset leasing software which is currently being used by dealerships, PMS proposal management systems and WFS wholesale finance systems.
The acquisition also brings a wealth of knowledge and experience to the NetSol family of companies. Abraxas Software consists of an experienced management team and a highly skilled group of software professionals with a dedicated support staff. "By using our best analysts and software designers in the local markets to specify the work, and using NetSol's ISO 9001 certified programmers in Pakistan to cut the code, we can reduce development costs considerably while maintaining tight management control over projects," said Fred Firth, managing director of the new NetSol-Abraxas, Australia. "The winning formula for the future of software development is the same as it has always been; produce a better quality product for a lower price, and deliver it on time," added Firth.
Firth, who has been designing and selling finance and insurance software for the automotive industry for nearly twenty years, continued, "The Insurance industry represents huge potential for the new company, when you consider the explosive growth already witnessed in Insurance / e-commerce Web sites in 1999. Abraxas Software has developed a number of PC and Internet-based products for the insurance industry, many of which are in daily use by Australia's leading insurance companies. There is no question in my mind that we are taking the only logical step towards the future of software development. Even Australia, which can produce software for two thirds of the cost of the U.S., is being priced out of the market by Asian developers. We have had a good run for the past sixteen years, but I don't see any future for software houses, working on large-scale projects, using local programmers. We will be increasing the number of analysts and software designers and reducing the number of programmers during this year, eventually transferring all of our programming work to NetSol in Pakistan. It will only be a matter of time before other software houses will follow our lead or go out of business."
Abraxas Software has developed a Windows-based finance and insurance system, which is considered among the best in the world. The company has also established itself as a leader in finance and insurance software development and has been recognized for its high customer satisfaction rating among competing software developers. Client feedback plays a major role in the company's research and development efforts. The company is moving further into Internet-based solutions and the rapidly expanding area of e-commerce. New and innovative products are under development and the company is entering potential new markets to the north of Australia, and in the USA and Europe. The company's main product line is the Oasys Finance and Insurance system. The system uses Remote Access Server (RAS) TCP/IP communications and links to all of Australia's leading insurers, credit reference bureaus and vehicle valuation databases.
NetSol is a leading software developer in the global information technology industry. Through its international team of over 200 software engineers, NetSol specializes in creating e-commerce and Web-based solutions for its ever-growing list of blue chip customers worldwide. Its commitment to excellence has been shown through its strong and matured quality control certifications such as the internationally recognized ISO 9001. NetSol has a proven offshore development model that has delivered a number of complex business applications for its customers. Its revenue base is 100 percent dollar-based whereas its cost base is 50 percent Rupee-based, giving it the ability to sell in dollars and buy in Rupees. NetSol's product portfolio covers the whole suite of application modules that are needed to run a captive leasing and finance operation. NetSol's proprietary products are used by a number of leading finance and leasing companies worldwide.
Safe Harbor Statement
The foregoing press release may include numerous forward-looking statements concerning the company's business and future prospects and other similar statements that do not concern matters of historical fact. The Federal securities laws provide a limited "safe harbor" for certain forward-looking statements. Forward-looking statements in this press release relating to product development, business prospects and development of a commercial market for technological advances are based on the company's current expectations. The company's current expectations are subject to all of the uncertainties and risks customarily associated with new business ventures including, but not limited to, market conditions, successful product development and acceptance, competition and overall economic conditions, as well as the risk of adverse regulatory actions. The company's actual results may differ materially from current expectations. Readers are cautioned not to put undue reliance on forward-looking statements. The company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or for any other reason.
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