VeriFone Holdings Inc. (NYSE: PAY) and Lipman Electronics Engineering (Nasdaq: LPMA; TASE: LPMA) today announced that they have entered into a definitive agreement for VeriFone to acquire Lipman
Rosh Haayin-based Lipman is a provider of electronic payment systems.
Following the acquisition, VeriFone stated that it will become the largest global provider of electronic payment solutions and services, capitalizing on accelerating growth in the emerging markets and demand for IP-based and wireless payment systems.
Lipman shareholders will receive for each Lipman share 0.5 shares of VeriFone common stock and $14.304 in cash, adjusted for a special dividend. The amount of the special dividend has not been finally determined but will likely exceed $23 million. Alternatively, Lipman shareholders may elect to receive either $29.07 in cash, or 0.9844 shares of VeriFone stock for each Lipman share, each adjusted for the special dividend. The cash and stock elections are subject to proration such that VeriFone will issue in the aggregate approximately 13.3 million shares of VeriFone stock and pay approximately $382 million in cash, adjusted for the special dividend.
The acquisition is valued at $793 million based on VeriFone's share price at the close of trading on April 7th, 2006.
Following completion of the acquisition, VeriFone will continue to trade on the New York Stock Exchange and will be dual listed on the Tel Aviv Stock Exchange.
VeriFone chairman and CEO Douglas G. Bergeron said, "The acquisition provides exciting opportunities for VeriFone. The two companies are the fastest growing and most profitable providers of point of sale electronic payment technologies. Geographically, the businesses are complementary, and will be the leader in North America and the emerging markets, and number one or number two in most other key markets world-wide. Through this acquisition we will extend our technology leadership, particularly in the rapidly growing wireless and IP segments. Most importantly, we will be able to bring new technologies to market more quickly, offer a broader set of solutions and increased level of service and support to our customers worldwide."
Lipman president and CEO Isaac Angel said, "The ability to leverage VeriFone's worldwide sales and marketing channels will increase the rate at which we can penetrate the emerging markets that have tremendous growth potential."
Lipman's revenue for 2005 was $235.4 million, an increase of 30.4% over the comparable period of 2004, and net profit for the year was $20 million.
VeriFone's 2005 revenues were $485.4 million, an increase of 24% over the comparable period of 2004, adjusted net profit was $49.7 million.
Lehman Brothers acted as financial advisor to VeriFone on the acquisition. Merrill Lynch acted as financial advisor to Lipman.
Published by Globes [online], Israel business news - www.globes.co.il - on April 10, 2006
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