Hypercom to purchase Thales terminals
The proposed business combination would represent the third largest global provider of electronic payment solutions and services. It will considerably strengthen Hypercom position in Europe, and bring new R&D and marketing skills to the company, especially relating to smart cards.
This move is consistent with Thales strategy to refocus on its core business, as at the same time, the company announced its intention to sell its Thales Computers subsidiary to Kontron, a German systems integrator specializing in complex and embedded systems. Thales Computers proposes rugged PowerPC and Intel hardware and software solutions, targeting defense, aerospace and naval industries. Its sales are expected to reach EUR 20 million in 2007. In 2006, Thales sold Magellan-Thales Navigation, its GPS subsidiary to the American investment fund Shah Capital Partners for US$ 170 million (EUR 116 million).
Thales e-Transactions is a major provider of secure card payment solutions in France, Germany, the United Kingdom, Spain, Belgium and Sweden, and currently is a profitable business line of Thales Group’s Security Solutions & Services Division, with unaudited proforma, consolidated revenues for the first three quarters of 2007 of EUR 104 million.
Hypercom provided Thales with a binding offer for a fully negotiated share purchase agreement wherein Hypercom would purchase the e-Transaction business line of Thales for US$ 120 million (EUR 82 million) in cash with a potential earn out of up to an additional US$ 30 million (EUR 20 million) based upon the combined companies’ performance in 2008. Hypercom intends to finance this investment with US$ 60 million (EUR 41 million) of its existing cash on hand, combined with a US$ 60 million (EUR 41 million) investment from Francisco Partners, a global private equity firm focused on investments in technology and technology-enabled services businesses with approximately US$ 5 billion (EUR 3.4 billion) of committed capital
Hypercom also announced changes in its top management, and Board of Directors.