In addition, VeriFone will also take over Sektor Payments operation from the Sektor Group of New Zealand.
These acquisitions resent an opportunity to VeriFone to expand into New Zealand with its broad range of payment solutions and managed services, leveraging its Point payments-as-a-service platform.
Meanwhile, ENZ will continue to operate under its existing brand name, EFTPOS New Zealand, but as a VeriFone company.
Being the largest EFTPOS solutions and payments provider in New Zealand, ENZ serves more than 40,000 merchant customers and offers end-to-end payment solution to customers, including card acceptance devices, software, services and processing.
On the other hand, Sektor Payments will operate as VeriFone New Zealand and will be the sole VeriFone distributor in New Zealand, empowered with the largest reseller network that provides VeriFone payment solutions to merchants.
The acquisition will strengthen VeriFone’s presence in the New Zealand market. VeriFone designs system solutions that facilitate the long-term shift toward electronic payment transactions from cash and checks.
Growth rates for electronic payment solution systems have been higher in international markets, primarily due to the relatively low penetration rate of electronic payment transactions in many regions, like Eastern Europe, Latin America and Asia. Consequently, in order to establish a footprint in key growing markets, VeriFone continues to make strategic acquisitions.
Competition continues to be stiff from the likes of NCR Corp. ( NCR), which recently acquired Retalix Ltd. approximately $650 million. Organic growth also remains a matter of concern.
Hence, we maintain our Neutral recommendation post the fourth quarter results, which missed the estimates by a penny leading to a significant fall in share price.
We currently have a Zacks #4 Rank, which translates into a short-term rating of Sell due to near-term pressure on the stock.
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