VeriFone Holdings Inc. is planning to go public for the second time.
The San Jose point of sale terminal manufacturer filed an S-1 application Tuesday with the Securities and Exchange Commission and hopes to raise about $230 million from an initial public offering of common stock.
According to VeriFone's registration statement, the company (and its majority owner, the Chicago venture capital firm GTCR Golder Rauner LLC) plans to use some of the proceeds to repay $72 million of debt and to pay a prepayment premium of $2.2 million. The rest would be used for general corporate purposes, "including potential acquisitions of companies and technologies that complement our business," the filing said.
Executives would not discuss the filing, because VeriFone is in a quiet period while the SEC reviews the application.
Credit Suisse First Boston Corp. and JPMorgan Securities Inc. are acting as the investment bankers for the proposed offering. No date has been set for the IPO.
VeriFone has passed through several hands since it was founded in 1981. It went public for the first time in 1990, but Hewlett-Packard Co. bought it in 1997.
Gores Technology Group acquired VeriFone in 2001 from Hewlett-Packard. VeriFone's chief executive, Douglas G. Bergeron, spearheaded the transaction.
GTCR bought a majority stake a year later. It has not said whether it would retain that stake.
Some analysts say the planned IPO is a way to take advantage of the increasing use of payment cards, which will probably drive up global demand for card readers.
VeriFone said it expects to capitalize on this trend by selling its readers in emerging markets, such as Eastern Europe, Latin America, and Asia. "Certain countries in particular, including Russia, India and China, are experiencing rapid growth in the usage of card-based payments," the filing said.
It cited the 34% increase in Visa and MasterCard purchase volume in China from 2002 to 2003 in China, and the 31% increase in India, as signs that these markets were poised for strong increases in POS terminal sales.
VeriFone's revenue for the fiscal year that ended Oct. 31 rose 15% over the previous year, to $390.1 million. It currently generates about 63.7% of its net revenue in the United States.
"Part of our strategy is to expand our penetration in existing foreign markets and to enter new foreign markets," the filing said.
But George F. Sutton, an analyst with Craig-Hallum Capital Group LLC, said VeriFone has to overcome some obstacles to succeed internationally.
"They're in a bit of a competitive disadvantage" against some rival terminal makers, including Ingenico, Hypercom Corp., and Lipman Electronic Engineering Ltd., all of which have larger market shares than VeriFone outside the United States, he said.
Still, the overall industry has strong growth potential, Mr. Sutton said. For example, he said, an international effort to require countries outside the United States to adopt smart card technology has had a "significant impact" on terminal sales.
Robert Dodd, an analyst for Regions Financial Corp.'s Morgan Keegan & Co. Inc., said that Tuesday's filing capped more than a year of speculation within the industry, and that VeriFone could be looking to raise money to buy up some of the smaller terminal makers in the field.
Visa International, MasterCard International, and American Express Co. are pushing prepaid and gift cards, as well as contactless payments, so the next few years will probably be "a very good period" for the card terminal industry, both in the United States and elsewhere, Mr. Dodd said.
