/// VeriFone’s CEO Explains Why It Spent $1 Billion on Acquisitions for a New Payments Strategy
VeriFone, the largest maker of cash registers and other payment devices, has spent more than $1 billion on acquisitions to expand internationally and to go after new opportunities, such as mobile payments. In an interview, Doug Bergeron explained to All Things D the reasoning behind spending spree, saying that the company is undertaking a major transformation that requires selling software and services — not just hardware. Only two weeks ago, VeriFone agreed to acquire Point , a major retail payment provider in Europe, for $817 million (not including $230 million in debt). Two weeks before that, it picked up Global Bay , a smaller company that helps retailers connect its e-commerce assets to physical stores through the use of iPads. Terms of the deal were not disclosed. Additionally, a year ago, it agreed to buy payment security provider, Hypercom, in an all-stock transaction valued at about $485 million, including debt. The three acquisitions easily push the company’s investment above $1 billion. A bet of this kind represents a substantial risk, but Bergeron believes the decision to turn into a services company was a no-brainer, even calling it “obvious.” The San Jose company, which has about 3,000 employees globally, has a long history of growing through acquisitions stretching back to 2005, so maybe it can pull it off. In its fiscal 2012, the publicly held company is projecting it will make a profit of up to $2.50 a share on revenues of up to $1.72 billion before the Point merger is taken into account. Earlier this year, VeriFone appeared on the defensive after Bergeron attacked San Francisco-based Square for not providing encryption in its mobile card readers. Since then, Square has promised to add another layer of protection, although the roll-out is still pending. Now, VeriFone seems to be on the offensive, having figured out what role it will play as mobile payments come increasingly into play. And despite Bergeron’s earlier outcry about Square, he says the company will act like Switzerland and will be neutral about which technology will win. In particular, VeriFone wants to be the software developer that makes all the new innovations, including the Google Wallet, PayPal, ISIS, the carrier-led initiative and others, work with with a retailer’s existing systems
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VeriFone’s CEO Explains Why It Spent $1 Billion on Acquisitions for a New Payments Strategy
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