SAN JOSE, Calif.--(BUSINESS WIRE)--VeriFone Systems, Inc. (NYSE: PAY), today announced it has signed a definitive agreement with Nordic Capital Fund V (“Nordic Capital”) to acquire Point, Northern Europe’s largest provider of payment and gateway services and solutions for retailers. VeriFone intends to extend the Point platform throughout the region and beyond, with the aim of creating the world’s largest infrastructure for rapid deployment of alternative payments.
VeriFone will pay approximately €600 million to acquire all of the equity of Point and will also retire at closing existing Point debt of approximately €170 million. The acquisition is expected to close by the end of 2011, and is subject to customary closing conditions. The transaction is expected to be accretive to non-GAAP earnings by $0.08 to $0.10 per fully diluted share in fiscal 2012 and $0.30 to $0.35 in fiscal 2013.
Point, based in Stockholm, has operations in 11 Northern European countries and serves a captive network encompassing almost 475,000 merchant contracts. Through this network, Point offers retailers a full range of services and solutions, including point-of-sale technology and support, gateway services, card encryption services, and multi-channel e-commerce processing. Point's recurring subscription services model ensures its customers always have the latest security, compliance and technological capabilities as well as uninterrupted and secure access to a broad range of mission critical services. Point efficiently passes transactions along from its network of gateways to a broad range of acquiring banks and processing entities.
Douglas G. Bergeron, VeriFone CEO, said: "We are delighted to welcome Point customers and Point employees to VeriFone. They have built a phenomenal business and we believe that the best is yet to come."
Bergeron added: “For the past two years, we have been transforming our business to respond to the rapidly evolving needs of consumers, retailers, and payment innovators worldwide. Our vision is to offer retailers everywhere a managed service to easily accept all existing payment types, including the evolving alternative and mobile payment methods being offered by Google, PayPal, Groupon, Isis, Visa, MasterCard, and American Express. At the same time, we can increasingly offer the new payment entrants easy and accelerated access to our worldwide installation of more than 20 million merchant lanes.”
Johan Tjärnberg, Point CEO, said: "We are committed to maintaining the high growth and entrepreneurial culture that has driven our success over the past two decades. We have known and worked with VeriFone for 20 years and their fast-paced culture is the Point culture." Point, established in 1988, has enjoyed nearly a decade of consistent double-digit revenue growth, expanding margins, and impressive product innovation.
Since Nordic Capital acquired Point in 2004, the company has been transformed to be Europe’s leading provider of electronic payment solutions. The 125 software developers at Point have built unique European multi-country payment software that works seamlessly for traditional electronic payments and Internet payments.
“Under Nordic Capital’s ownership, Point has had fantastic growth, with sales close to five times higher than at the time of acquisition and taken the position as the leader in advanced payment services in Europe. Nordic Capital has supported the management to make significant R&D investments and do strategic add-on acquisitions, in order to create value and sustainable growth opportunities, and thereby make sure that Point remains a European leader in a field that has a tremendous growth potential,” said Fredrik Näslund, Partner, NC Advisory AB, advisor to the Nordic Capital Funds.
During the first 12 months, VeriFone expects the acquisition to add approximately $260 million in sales. The acquisition is also expected to be immediately accretive to VeriFone's gross margins, operating margins and growth rates. VeriFone expects total services revenue to exceed 30 percent of sales in fiscal year 2012, and 50 percent of revenue by fiscal year 2015. Detailed guidance will be provided at the VeriFone year-end conference call on December 14, 2011.
VeriFone was advised by Credit Suisse, KPMG, Gernandt & Danielsson, and Sullivan & Cromwell; Barclays Capital provided strategic advice to the company. J.P. Morgan, Bank of America Merrill Lynch, Wells Fargo Bank, Barclays Capital, and RBC Capital Markets have committed $1.6 billion to finance the acquisition, refinance VeriFone existing debt of $0.5 billion, and enable the company to maintain ample liquidity post transaction. Point and Nordic Capital were advised by J.P. Morgan, Seb Enskilda and White & Case.
Webcast Information
VeriFone will conduct a conference call to discuss the announcement with its shareholders today, Monday, November 14, at 6:00 AM Pacific. To access the audio webcast with slides, please go to VeriFone’s website (http://ir.verifone.com) at least ten minutes prior to the call to register.
To access the live conference call by phone, please dial the following numbers:
Domestic callers: 866-730-5766
International callers:
+1-857-350-1590
Passcode: 6299 2650
The recorded audio webcast will be available on VeriFone’s website until November 21, 2011.
A replay of the conference call, which can be accessed by dialing toll-free 888-286-8010, and outside the U.S. by dialing +1-617-801-6888, will be available until November 21, 2011. The access code for the replay is 8334 3026.
Financial Measures
This press release includes certain forward-looking non-GAAP financial measures, specifically anticipated non-GAAP net income per share. A reconciliation of these forward-looking non-GAAP financial measures presented in this press release is not available to the Company without undue effort.
Management uses non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. Management believes that these non-GAAP financial measures help it to evaluate VeriFone's performance and to compare VeriFone's current results with those for prior periods as well as with the results of peer companies. VeriFone's competitors may, due to differences in capital structure and investment history, record certain income and expense items, including interest, tax, depreciation, amortization, and other non-cash expenses, that differ significantly from VeriFone's, in a manner that VeriFone's management believes does not reflect underlying operating performance that is comparable to VeriFone's. Management also uses these non-GAAP financial measures in VeriFone's budget and planning process. Management also believes that the presentation of these non-GAAP financial measures is useful to investors in comparing VeriFone's operating performance in any period with its performance in other periods and with the performance of other companies that represent alternative investment opportunities. These non-GAAP financial measures contain limitations and should be considered as a supplement to, and not as a substitute for, or superior to, disclosures made in accordance with GAAP.
These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and may therefore differ from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures do not reflect all amounts and costs, such as employee stock-based compensation costs, cash that may be expended for future capital expenditures or contractual commitments, working capital needs, cash used to service interest or principal payments on VeriFone's debt, income taxes and the related cash requirements, and restructuring charges, associated with VeriFone's results of operations as determined in accordance with GAAP.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for VeriFone Systems, Inc.
This press release includes certain forward-looking statements related to VeriFone Systems, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of VeriFone Systems, Inc. and Point. These risks and uncertainties include whether the proposed transaction described in this press release can be completed in a timely manner, and whether the anticipated benefits of the proposed transaction can be achieved. For a further list and description of risks and uncertainties, see our periodic filings with the Securities and Exchange Commission. VeriFone and Point are under no obligation to, and expressly disclaim any obligation to, update or alter their forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.
About Point
Point is the leading provider of multichannel electronic payment solutions in Europe focusing on payment services to merchants. Point installations handle 10 million transactions per day, and customers include some of the largest retail companies in Europe, as well as small independent stores and online merchants. Point has more than 800 employees and a local presence in Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Lithuania, Norway, Sweden and the UK. For more information, please visit www.pointinternational.com.
About VeriFone Systems, Inc. (www.verifone.com)
VeriFone Systems, Inc. (“VeriFone”) (NYSE: PAY) is the global leader in secure electronic payment solutions. 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.