Credit: Shutterstock photoVeriFone Systems, Inc.PAY will be acquiring Canada-based payment gateway, AJB Software Design for an undisclosed amount. The transaction, subject to regulatory approval, is likely to conclude in the second quarter of 2016.
VeriFone will divulge more details about the transaction at its first quarter earnings conference call.
Headquartered in Toronto, AJB software links over 500,000 devices from VeriFone and others through its on-premise gateway and other solutions to over 100 processors and applications. Its clientele boasts 150 large retailers across U.S and Canada.
VeriFone expects the acquisition to aid its expansion in the North American region by offering "payment and commerce services that meet merchants' demands for additional simplicity, security, flexibility and functionality". AJB will also offer solutions certified by big Canadian banks for accepting EMV technology. It will also extend support for VeriFone and non-VeriFone devices to help merchants' "manage and seamlessly expand their payments systems". Lastly merchants' can also avail a lot of subscription based "hosting options".
This is the second big acquisition announcement in a span of three months. In Nov 2015, the company had acquired German Payment as a Service (PaaS) provider, InterCard AG for an undisclosed amount to expand its presence in Europe.
As the "cashless form" of payment gains traction across Europe, the acquisition of InterCard AG will help VeriFone to expand its service offerings to its retail clientele across the region. Munich based InterCard AG offers a wide range of payment services like terminal sales and leasing, field support services (helpdesk, installation & maintenance), and gateway services (transaction routing).
Strategic acquisitions have played a key role in VeriFone's business expansion.The acquisitions have expanded the company's reach into regions and countries such as the Middle East, Northern Europe, South Africa and India. We believe that the company will continue pursuing acquisitions that strategically fit its overall business mix and are easy to integrate over the long term
VeriFone has a dominant position in the electronic payment systems and services market, which boasts of companies like Fiserv, Inc. FISV , Heartland Payment Systems, Inc. HPY and Total System Services, Inc. TSS . The company has around 29 million system terminals globally. The company provides more than 50% of the world's EMV capable terminals.
At present, VeriFone carries a Zacks Rank #3 (Hold).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
