Under the terms of the transaction, which has been unanimously approved by the boards of directors of both companies, Hypercom shareholders will receive a fixed ratio of 0.23 [image-nocss] shares of VeriFone common stock for each Hypercom share they own, valued at approximately $7.32 per share based on the closing price on November 16, 2010. VeriFone will also assume Hypercom's outstanding warrants and stock options in the transaction.
"Consistent with our vision as a global leader in secure electronic payment solutions, we have placed strategic focus on replicating our North American success in key markets in continental Europe," said VeriFone CEO Douglas G. Bergeron. "Hypercom has established itself in a number of important European markets, and this acquisition is an excellent and complementary way for us to accelerate our overseas growth, increase innovation and build value for our shareholders."
"Over the last three years, Hypercom has strengthened customer relationships and increased revenue from almost $290 million to approximately $450 million," said Philippe Tartavull, CEO and president of Hypercom. "Combined, Hypercom and VeriFone will create new growth opportunities and further drive penetration in the market. This transaction delivers a significant premium to our shareholders who should also benefit from the upside of being owners of an even stronger global company in the fast-growing electronic payment solutions space."
The transaction is subject to approval by Hypercom shareholders and customary regulatory approvals, and is anticipated to close in the second half of 2011. The transaction is expected to be solidly accretive to current VeriFone shareholders during the first twelve months of combined operations, excluding one-time costs.
J.P. Morgan Securities LLC acted as VeriFone's exclusive financial advisor and Sullivan & Cromwell LLP acted as VeriFone's legal counsel. Hypercom's exclusive financial advisor was UBS Securities and its legal advisor was DLA Piper US LLP.
San Jose, Calif.-based VeriFone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. VeriFone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide.
Phoenix, Ariz.-based Hypercom is a global payment technology provider that delivers a full suite of high security, end-to-end electronic payment products, software solutions and services. The company's solutions address the high-security electronic transaction needs of banks and other financial institutions, processors, large-scale retailers, smaller merchants, quick-service restaurants and users in the transportation, petroleum, healthcare, prepaid, self-service and many other markets.
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