Ingenico SA is buying easycash Beteiligungen GmbH, a German payment processor, for $426 million from Warburg Pincus LLC, a New York private-equity firm, the point of sale terminal maker announced Friday.
Easycash provides terminal sales, transaction processing and loyalty programs in Germany, Ingenico, of France, said, noting it will use easycash to "leverage on the growth of payment transactions in the coming years."
During a conference call with analysts Friday, Ingenico CEO Philippe Lazare said the payments company is targeting Eastern Europe for expansion.
Gil Luria, an analyst at Wedbush Morgan Securities in Los Angeles, said Ingenico is integrating vertically into the payments value chain.
"They're going away from just providing the terminal. The reason they're doing that is that part of the payments value chain has higher growth and higher [profit] margins," Luria said. "They feel that can help the company grow faster and become more profitable."
Easycash has 275,000 point of sale terminals, which generate more than 1 billion transactions, Lazare said, estimating that approximately 33% of the terminals are Ingenico devices. Easycash customers will not be forced to switch their terminals to Ingenico devices. "Most of the time customers are making their own choices, and we'll respect that," he said. Easycash generated revenue of $126 million in 2008, Ingenico said. Warburg Pincus bought easycash in 2006 from First Data Corp. The sale price was not disclosed.
