DLA Piper announced that it is representing Hypercom Corporation in its stock-for-stock with VeriFone Systems, Inc. The deal is valued at approximately $485 million. Verifone and Hypercom are leading global companies in electronic payment solutions, and the merger will combine Hypercom’s strong European presence with Verifone’s strong US and Asian presence.
The deals include several unique features designed to produce certainty of closing and appropriate conduct between rivals during the signing to closing phase, including: (i) a 7% reverse break fee in favor of Hypercom in the event Verifone is unable to achieve regulatory approvals, as well as the requirement that Verifone agree to spin off operations representing up to $124 million in revenues in order to achieve such approvals, and (ii) the requirement that Verifone not poach employees or announce any discontinuance of any Hypercom product line (or pricing changes) through closing, and after the closing continue to support Hypercom hardware and software for fixed periods, with the breach of these provisions or even announcement of plans to the contrary giving to Hypercom the right to $1 million in liquidated damages per occurrence, specific performance or termination for breach.
Closing is expected to occur in the second half of 2011.
Steven Pidgeon (Phoenix) and Richard Millard (Silicon Valley) led the deal team, with assistance from Nicole Campbell and Andy Moosman (both Phoenix). Paolo Morante (New York) and Bertold Bar-Bouyssiere (Brussels) are handling antitrust/competition matters, and William Hoffman, David Plewa and Stacy Paz (all Silicon Valley) are handling tax and benefits matters. Pidgeon has worked with Hypercom ever since he handled their IPO in the mid-1990s.
