DoJ sues to block VeriFone
DoJ claims that in the VeriFone/Hypercom transaction the assets of Hypercom US “are to be sold to another significant competitor (Ingenico) in the market in a manner that does not create a new, independent, long-term competitor”
Previously, in November 2010, VeriFone and Hypercom entered into a merger agreement valued at US$ 485 million. In April 2011, in an effort to resolve potential antitrust issues with the merger, an agreement to sell Hypercom’s US point-of-sale terminal business for US$ 54 million in cash was reached with Ingenico (cf. SIW #11-14).
Nonetheless, US regulators said that was not enough to resolve antitrust concerns. Consequently, VeriFone and Hypercom jointly announced that they intend to work with the DoJ to better understand its concerns and assess various options for the planned divestiture of Hypercom’s US business, including the possibility of a divestiture to an alternative buyer. And Ingenico in its turn announced that considering the timeline the company “anticipates that it may not be in a position to successfully close the deal”
On the heels of these events ViVOtech, a US-based NFC software and systems company, has renewed its approach to acquire the US assets of Hypercom, repeating its announcement from March 2011 on the readiness to buy Hypercom US assets. ViVOtech, already announced its intention to go public in 2012 (cf. SIW #11-16), and anticipates the valuation of the company to be US$ 1 billion (EUR 708 million). ViVOtech, a 90 employees company, claims to have already installed 800,000 contactless readers worldwide.
Meanwhile, VeriFone and Hypercom, assuming a successful resolution of this and other closing conditions, say they believe the merger can be completed in H2/2011.