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The announcement resolves the question of what would happen to those operations when VeriFone Systems completes its purchase of the remainder of Hypercom.
April 4 -
Vivotech said it has approached VeriFone about acquiring the U.S. assets of Hypercom once VeriFone's deal for Hypercom is complete.
March 31
VeriFone Systems Inc. and Hypercom Corp. are considering selling Hypercom's U.S. business to an "alternative buyer" in response to an antitrust lawsuit the Justice Department filed Thursday.
The Justice Department filed the suit to block VeriFone's proposed $485 million acquisition of Hypercom, which the agency said would "substantially lessen" competition for payment terminals in the U.S.
Antitrust issues have surrounded the deal since it was announced in November. In an effort to allay the concerns, Hypercom said in April that it would sell its U.S. business to a competitor, Ingenico SA of France, for $54 million.
But that deal would not resolve antitrust concerns because it would not "create a new, independent, long-term competitor" in the terminal market, the Justice Department said in a press release Thursday.
Also, agreements between Ingenico and VeriFone would make it easier for the two companies to coordinate pricing for point of sale terminals, the agency said.
"The combination of VeriFone and Hypercom would likely lead to retailers paying higher prices for POS terminals," Christine Varney, assistant attorney general for the Justice Department's antitrust division, said in the agency's release.
The lawsuit opens the door for others to join the terminal business.
ViVOtech Inc., a Santa Clara, Calif., company that specializes in mobile payment technology, approached VeriFone in March about buying Hypercom's U.S. payments business. The company said Friday that it had "renewed" its approach to buying the assets, which would allow it to expand adoption of mobile technology.
Private-equity players have also expressed interest in the business, Darrin Peller, an analyst with Barclays Capital who follows the terminal makers, said in a research note Thursday.
The Justice Department's lawsuit "should not prevent the deal from closing overall," Peller wrote.
VeriFone and Hypercom said in a joint statement Thursday that they were working with the Justice Department to "better understand its concerns and assess various options" for the sale of Hypercom's U.S. business, "including the possibility of a divestiture to an alternative buyer."
