VeriFone Buys the e-PSP Point
- The world leader in POS terminal manufacturing VeriFone widens its range of offers through purchasing the Swedish e-payment processor Point. The latter processes face-to-face and online payments for both large scale retailers and small merchants. It also proposes payments gateway services, card encryption and support services.
- This acquisition cost VeriFone over 770 million euros, covering 600 million euros for Point’s assets and 170 million to pay off its debts. Private-equity firm Nordic Capital has been Point’s main shareholder since 2004 and had hired JPMorgan for this sale expected to reach 300 million euros.
- Through this purchase, VeriFone improves its presence in Europe and caters for its relationship with merchants. Point manages card acceptance for 475,000 merchants in 11 Northern European countries, including the UK, the Baltic states and France since its acquisition of the French independent e-PSP Paybox (June 2011) and terminal installer/maintainer Xileo (2010).
- As all main players are currently focusing on diversification, they couldn’t but meet on the card payment value chain. VeriFone has been developing an external growth strategy to catch up with its rivals and address the competitive pressure induced by international schemes (see MasterCard’s and Visa’s recent acquisitions) but also to address competitive issues springing from challenging new rivals such as Google, Apple and ISIS. In a precedent step, the US manufacturer has acquired Gemalto’s French POS terminal estate, and, most of all, its US rival Hypercom end 2010.
- Due to integration risks, this succession of acquisitions causes analysts to lower their perspectives for VeriFone’s equity, rating them as “stable”, graded BB- by Standard & Poor’s. Nevertheless, VeriFone counts on Point’s positive contribution in its annual sales figures in 2012 to 193 million euros. By 2015, service offers should account for half of VeriFone’s overall business revenue.