Hewlett-Packard acquires Verifone to push E-Commerce
Ray Van Eng (04/24/97)
Hewlett-Packard (HP) has agreed to purchase VeriFone for $1.18 billion paid for with a stock swap. The acquisition would almost certainly mean an acceleration of the deployment of smart card and secure Internet credit card transaction technologies. Verifone's leadership in point-of-sale equipment and Internet payment system would compliment nicely to HP's expertise in back-end server and transaction products. HP is also a founding member of the PC/SC Workgroup, an industry consortium that includes Microsoft, Gemplus (the world's biggest smart card maker), IBM, Sun Microsystems and many others who are interested in integrating smart card technologies to personal computers. Recently, Verifone has been working closely with HP in delivering electronic commerce enabled web server products (including the ability to handle the secure electronic transaction -- SET -- protocol from Visa and Mastercard) for banks and other financial institutions. To sum up, the partnership will bring Verifone's "ability to move money" into the "extended enterprise" framework that HP has been building to bridge the distance between businesses and their customers. Verifone will continue to operate as an independent company, the company's CEO Hatim Tyabji indicated. With an annual income of $437 million dollars last year, Verifone may seems over-priced for some. But Wall Street investors react positively to the merger news. When the announcement was made on 04/23/97, Verifone's stock was pushed up by about 60% to more than $47 from a close at $30 per share the day before. |
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