VeriFone will acquire Point for €600M
VeriFone Systems (San Jose, CA, USA) has signed a definitive agreement with Nordic Capital Fund V (“Nordic Capital”) to acquire Point, Northern Europe’s largest provider of payment and gateway services and solutions for retailers.
VeriFone will pay approximately €600 million to acquire all of the equity of Point and will also retire at closing existing Point debt of approximately €170 million. The acquisition is expected to close by the end of 2011, and is subject to customary closing conditions.
Point, established in 1988, has enjoyed nearly a decade of consistent double-digit revenue growth, expanding margins, and impressive product innovation.
Since Nordic Capital acquired Point in 2004, the company has been transformed to be Europe’s leading international provider of electronic payment solutions. The 125 software developers at Point have built unique European multi-country payment software that works seamlessly for traditional electronic payments and Internet payments.
“We are delighted to welcome Point customers and Point employees to VeriFone. They have built a phenomenal business and we believe that the best is yet to come. For the past two years, we have been transforming our business to respond to the rapidly evolving needs of consumers, retailers, and payment innovators worldwide. Our vision is to offer retailers everywhere a managed service to easily accept all existing payment types, including the evolving alternative and mobile payment methods being offered by Google, PayPal, Groupon, Isis, Visa, MasterCard, and American Express. At the same time, we can increasingly offer the new payment entrants easy and accelerated access to our worldwide installation of more than 20 million merchant lanes.” Douglas G. Bergeron, VeriFone CEO
Point, based in Stockholm, has operations in 11 Northern European countries and serves a captive network encompassing almost 475,000 merchant contracts. Through this network, Point offers retailers a full range of services and solutions, including point-of-sale technology and support, gateway services, card encryption services, and multi-channel e-commerce processing. Point’s recurring subscription services model ensures its customers always have the latest security, compliance and technological capabilities as well as uninterrupted and secure access to a broad range of mission critical services. Point efficiently passes transactions along from its network of gateways to a broad range of acquiring banks and processing entities.
During the first 12 months, VeriFone expects the acquisition to add approximately $260 million in sales. The acquisition is also expected to be immediately accretive to VeriFone’s gross margins, operating margins and growth rates. VeriFone expects total services revenue to exceed 30 percent of sales in fiscal year 2012, and 50 percent of revenue by fiscal year 2015.
“Under Nordic Capital’s ownership, Point has had fantastic growth, with sales close to five times higher than at the time of acquisition and taken the position as the leader in advanced payment services in Europe. Nordic Capital has supported the management to make significant R&D investments and do strategic add-on acquisitions, in order to create value and sustainable growth opportunities, and thereby make sure that Point remains a European leader in a field that has a tremendous growth potential,” Fredrik Näslund, Partner, NC Advisory AB, advisor to the Nordic Capital Funds.
VeriFone was advised by Credit Suisse, KPMG, Gernandt & Danielsson, and Sullivan & Cromwell; Barclays Capital provided strategic advice to the company. J.P. Morgan, Bank of America Merrill Lynch, Wells Fargo Bank, Barclays Capital, and RBC Capital Markets have committed $1.6 billion to finance the acquisition, refinance VeriFone existing debt of $0.5 billion, and enable the company to maintain ample liquidity post transaction. Point and Nordic Capital were advised by J.P. Morgan, Seb Enskilda and White & Case.