The French terminal maker Ingenico SA said Monday that it is buying Hypercom Corp.'s U.S. payments systems business for $54 million.
The announcement resolves the question of what would happen to those operations when VeriFone Systems Inc. completes its deal for the remainder of Hypercom. Just last week, Vivotech Inc. of Santa Clara, Calif., said it was in the running to pick up Hypercom's U.S. business.
VeriFone, of San Jose, Calif., announced in November that it would buy Hypercom, of Scottsdale, Ariz., for stock valued at $485 million. It said in January that it did not plan to keep Hypercom's U.S. operations because of potential antitrust issues.
"It's unlikely that VeriFone would have gotten the approval to take over the other asset without this deal being consummated," said Brian Riley, research director in the bank cards practice at TowerGroup.
The choice of Ingenico, VeriFone's largest rival, to pick up that piece was nevertheless "really strange bedfellows," Riley said.
Up until now, Ingenico has been struggling to get a foothold in the U.S., said Gil B. Luria, a Wedbush analyst. Because Ingenico's U.S. business is so much smaller, Luria said the deal does not pose the same regulatory issues as the Verifone-Hypercom combination.
"I'm guessing the reason they picked Ingenico is that it's the best way to get regulatory approval in the U.S.," Luria said. "They are paying a price, which is introducing a very strong competitor."
A spokesman for VeriFone said he could not comment on the deal. Hypercom did not immediately return a request for comment. Ingenico declined to comment beyond its press release, citing regulatory concerns.
VeriFone's purchase is expected to close in the second half of this year. Ingenico's deal for Hypercom's U.S. terminal business is expected to close just before that. VeriFone said that it would keep Hypercom's non-payment-terminal networking products business in the U.S.
Philippe Lazare, Ingenico's chief executive, said in a press release that Ingenico's deal would "accelerate the adoption of contactless [near-field communication] technology," which many are testing for mobile payments.
The deal would also "enable us to accelerate our presence in the U.S., the world's largest payment terminal market," Lazare said.
Ingenico said that in connection with this deal, it has made Thierry Denis the president of its North American business. Denis had been general manager of Ingenico's Australia business.
Ingenico made a failed bid to buy Hypercom's entire business in 2008.
