VeriFone Holdings Inc. said it has completed its $795 million acquisition of Lipman Electronic Engineering Ltd., a competitor based in Rosh Haayin, Israel.
The acquisition, which closed Wednesday, made VeriFone the world’s largest point of sale terminal company.
The San Jose company said the purchase improved its access to several large, rapidly growing markets, including China, India, Russia, and Brazil. Lipman, is also strong in the United Kingdom, Spain, Italy, and Israel, and it was considered a very strong player in the wireless terminal niche.
“The ultimate goal for us is to better serve these large markets, because this is where we see tremendous future growth, and opportunity,” said William G. Atkinson, who was named VeriFone’s executive vice president of payment systems. Previously he had been its executive vice president of business development and global marketing.
VeriFone does business in 110 countries, compared to Lipman’s 24, but Lipman was “able to bring more focus to some of these large emerging markets,” he said.
Many Lipman executives joined VeriFone. Isaac Angel, Lipman’s chief executive, is now VeriFone’s executive vice president of global operations. “We’re using and combining the management teams of both companies, and combining the in-country resources of both companies,” Mr. Atkinson said.
VeriFone now has the largest share of the global terminal sales market, 34%, according to figures from the industry newsletter The Nilson Report. VeriFone and Lipman were previously ranked No. 2 and No. 3.
The French manufacturer Ingenico Group now has the No. 2 share, with 25.2%.
Mr. Atkinson said the Lipman brand will disappear from the market, but its product brand, Nurit, will be retained.
Tien-Tsin Huang, an analyst with JPMorgan Securities Inc., wrote in a note issued Wednesday that VeriFone will be able to “continue to outperform its peers” as a result of the acquisition. “We believe VeriFone can build upon its 34% worldwide market share as competitors struggle with current generation products with less attractive margins.”
Also, a “formidable” research and development budget, now bigger than those of the next two largest terminal manufacturers, “should keep VeriFone ahead on the product cycle,” Mr. Huang wrote.
