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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 the sale of Hypercom's U.S. business to an "alternative buyer" in response to an antitrust lawsuit the U.S. 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.
Questions about antitrust issues have surrounded the deal since it was announced in November. In an effort to squelch such concerns, Hypercom in April said it would sell its U.S. business to French competitor Ingenico SA 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 about its lawsuit on 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 other players to gain a toehold in the terminal business.
ViVOtech Inc., a Santa Clara, Calif., company that specializes in mobile payment and other point of sale technology, has said it was interested in buying Hypercom's U.S. business before the Ingenico deal was announced. A spokeswoman for ViVOtech could not be immediately reached for comment on Friday morning.
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 on Thursday.
The Justice Department's lawsuit "should not prevent the deal from closing overall," Peller wrote.
VeriFone and Hypercom said in a joint statement on Thursday that they are working with the agency 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."
