Wednesday, August 22, 2018
Francisco Partners' acquisition of Verifone Systems Inc. for $3.4 billion, completed Aug. 20, 2018, heralds a new chapter for the storied payments industry brand. Incoming CEO Michael Pulli underscored the company's continuing commitment to customers, partners and payments industry stakeholders. "Becoming a portfolio company of Francisco Partners will allow us to accelerate and enhance the services and solutions that you – and our entire, global network of customers and partners – rely on each and every day," he stated.
"Verifone's payments technology is critical to the operation of merchants around the world," added Peter Christodoulo, partner at Francisco Partners in a statement. "We look forward to working with Mike and the Verifone team to strengthen the Verifone franchise and bring innovative payments and commerce solutions to Verifone's customers."
The milestone also marks the end of Verifone as a publicly traded company on the New York Stock Exchange. Verifone's most recent initial public offering of $10 per share under symbol PAY occurred in 2004 under former CEO Douglas G. Bergeron. The now delisted stock has been distributed at $23.04 per share in cash, company representatives stated.
Verifone has maintained consistently high hardware unit sales since its inception in 1981, generating $472.5 million hardware revenue in 1996, before being acquired by Hewlett-Packard the following year for $1.15 billion. Robin Abrams, who served as Verifone's CEO from 1997 to 1999, noted the HP merger occurred when ecommerce technologies were in a nascent stage.
"It's impossible to know which of these various technologies will emerge first in the Internet payment space," she stated in an interview with Card Technology in July 1998. "We see a huge opportunity in working directly with telecommunications companies in the future, and we think we'll have to play a bigger role in helping banks and other partners develop smart cards."
The Gores Technology Group, a private equity firm, acquired Verifone in 2001 and spun off the company a year later to GTCR Golder Rauner LLC, crediting CEO Douglas Bergeron for its fast turnaround. Bergeron served 12 years as CEO until Paul Galant replaced him in 2013.
As Verifone's outgoing CEO, Galant said the company's public-to-private makeover "reflects the progress we have made executing our transformation from a terminal sales company to a payments and commerce solutions provider."
In an interview with The Green Sheet, Joe Mach, president, North America at Verifone, said company leaders expect the newly privatized company to benefit partners and merchants in numerous ways, particularly by enabling the company to:
As Abrams predicted, Verifone has ventured "far beyond the terminal payment business we've always been in," as it continues to develop the Internet space, launching business solutions that can be integrated into a variety of business environments. Merchants can peruse the Merchant Marketplace for apps designed to improve efficiencies and generate recurring revenue streams, she noted.
Pete Hart, chairman of Francisco Partners' board of directors, said Galant joined Verifone in 2013, a critical time for the company; he is grateful that Gallant will continue to play a role in the company's future. "Paul's drive, vision and deep commitment to Verifone and our clients has positioned the company well for its next phase of growth," he added.
As he reflected on his five-year tenure with Verifone, Galant said it was an honor to lead during a time of rapid change in the payments industry. "We have restored Verifone to a position of strength while staying true to our roots of innovation, and I transition to my new role having full confidence that Verifone is in the best position from which to drive a new chapter of growth," he stated.
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