VeriFone, Hypercom Agree On Acquisition Deal

VeriFone Systems Inc. and Hypercom Corp. have set aside their differences, announcing this morning an agreement in which VeriFone will acquire the competing point-of-sale terminal maker in an all-stock transaction valued at $485 million, including net debt VeriFone would assume.

Scottsdale, Ariz.-based Hypercom last month had rebuffed VeriFone’s earlier unsolicited offer valued at $280 million (see story), prompting VeriFone CEO Doug Bergeron to press ahead with the acquisition effort (see story). 

Analysts had said VeriFone’s initial bid was too low (see story).  Others said the deal could violate antitrust laws, though Bergeron said he might divest Hypercom’s U.S. business to overcome such issues, saying the company was more interested in the terminal maker’s overseas activities (see story).

The boards of both companies approved the terms of the deal, in which Hypercom shareholders would receive a fixed ratio of approximately 0.23 shares of VeriFone common stock for each Hypercom share they own, valued at approximately $7.32 per share based on the Nov. 16 closing price.

Hypercom made a case for demanding better terms with a strong third quarter (see story).

The companies expect to close the deal in the second half of 2011, following Hypercom shareholder and regulatory approvals.