VeriFone Holdings Inc. has become the lead investor in Semtek Innovative Solutions Corp. and is likely to eventually acquire the remaining company shares, according to the San Jose point of sale terminal maker.
Semtek is the developer of encryption technology that VeriFone uses in its VeriShield Protect product that encrypts sensitive cardholder data during a transaction.
"It is almost certain we will eventually acquire the remaining shares," Douglas Bergeron, VeriFone's chief executive, said last week, declining to reveal how many shares the company holds in Semtek.
The two other major investors in Semtek are venture capital firms RRE Ventures LLC of New York and Venrock of Palo Alto, Calif.
VeriFone chose to increase its investment in Semtek because it is seeing "amazing customer interest" in its VeriSheild product. It also is seeing interest from European companies.
RBS Worldpay Inc., an Atlanta unit of Royal Bank of Scotland Group PLC, will make VeriSheild Protect a preferred platform for its customers under a marketing agreement signed with VeriFone in September.
VeriFone is negotiating similar arrangements with other payment processors, according to the company.