VeriFone Systems Inc (NYSE: PAY) stock enhanced over 52% on April 10th, 2018 (as of 12:06 PM GMT-4; Source: Google finance) driven by the acquisition proposal by a private equity firm-led investor group in a $3.4 billion deal.
The group would get $23.04 in cash for each share of Verifone common stock held, which drove the stock to rally today. Board of Directors gave thumbs up to the deal and unanimously approved the definitive agreement while recommending Verifone stockholders vote in favor of the transaction.
The group sees this transaction would help them progress from a terminal sales company to a payments and commerce solutions provider. They intend to leverage the Francisco Partners’ resources, expertise and track-record growing global technology businesses. The group is also confident that they would be better positioned to serve the needs of their clients around the globe.
British Columbia Investment Management Corp, Canadian institutional investor is part of the investor group that is buying Verifone. Qatalyst Partners is the financial adviser to this while Sullivan & Cromwell LLP is the legal adviser. The group expects this transaction to close during the third quarter of this year.
The merger agreement includes a “go-shop” period, which permits Verifone’s Board and advisors to actively initiate, solicit, encourage, and potentially enter into negotiations with parties that make alternative acquisition proposals through May 24, 2018.
For FY18the group aims to Generate >15% of total Systems sales from new devices. They expect to Surpass 2 million connected devices globally while Leverage device footprint to offer omni-channel services that improve merchant productivity and consumer experiences at the POS
For the first quarter of FY18, they derived over 7% of total Systems sales in Q1 from new devices; on track to achieve year-end ramp targets. The New products are currently selling in more than half of top 20 revenue-producing Systems markets. As per Carbon pipeline, they are also finishing certifications with large acquirers and executing directly with ISOs (i.e., Paysafe). mPOS is rising double-digits and adding new products (e280 mid-range) to the device line-up