(Bloomberg) -- An investor group led by tech-focused private equity firm Francisco Partners agreed to acquire payments technology company VeriFone Systems Inc. for about $3.4 billion including debt.
Francisco Partners will pay $23.04 in cash per VeriFone share, a premium of about 54 percent over the company’s closing share price Monday, according to a statement. The investor group also includes British Columbia Investment Management Corp.
“VeriFone’s transformation from a hardware provider to a best-in-class payments and commerce solutions provider is just beginning,” said Jason Brein, a partner at Francisco Partners.
VeriFone, whose point-of-sale card readers are retail staples, has struggled with delays in transitioning to chip-card technology in the U.S. as a lengthy certification processes for the new payment terminals delayed domestic sales. The firm also faces increased competition from Silicon Valley upstarts such as Square Inc. that offer improved software and more transparent pricing. The company sold its taxi advertising operations for $30 million in December after competition from ride-hailing services such as Uber Technologies Inc. and Lyft Inc. crimped meter revenue.
VeriFone shares surged as much as 53 percent to $22.89 in late trading in New York. The stock has dropped 15 percent this year, compared with the 1.5 percent advance of the 63-company S&P 400 Information Technology Index.
Led by founding partner and Chief Executive Officer Dipanjan Deb, Francisco Partners owns stakes in companies including SmartBear Software, IT administration and security company Quest Software Inc. and surveillance-software maker NSO Group Ltd.
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