[01/03/08]
Hypercom Corporation, the high security electronic transaction solution provider, announced that:
? It has entered into exclusive negotiations with Thales SA, a leading international electronics and systems group serving defense, aerospace and security markets worldwide, to acquire the e-Transactions business line of Thales.
? It has obtained a $60 million financing commitment from Francisco Partners.
? Philippe Tartavull has been promoted to Chief Executive Officer and President of Hypercom Corporation, effective immediately, and has been appointed to the Board of Directors. He was previously President and Chief Operating Officer of the Company.
? Norman Stout has been elected Chairman of the Board, replacing Daniel D. Diethelm who will remain as a member of the Board.
? Johann Dreyer, Chief Executive Officer and Director of S1 Corporation, has been appointed to the Hypercom Board of Directors, bringing the total number of directors to six. Upon the closing of the intended acquisition of the e-Transactions business line of Thales, Keith Geeslin, Partner of Francisco Partners, and Jack McDonnell, Jr., retired Chairman, Chief Executive Officer and founder of TNS, are expected to be appointed to the Hypercom Board of Directors.
Acquisition of e-Transaction Business Line of Thales
Hypercom announced that it has entered into exclusive negotiations with Thales SA to acquire the e-Transactions business line of Thales. The e-Transactions business line of Thales is a leading provider of secure card payment solutions in France, Germany, the United Kingdom, Spain, Belgium and Sweden, and currently is a profitable business line of Thales Group's Security Solutions & Services Division, with unaudited proforma, consolidated revenues for the first three quarters of 2007 of ?104 million (US$142 million at an exchange rate of approximately 1.36 Euros to the Dollar). The proposed business combination would represent the third largest global provider of electronic payment solutions and services.
The parties contemplate the execution of a fully negotiated share purchase agreement wherein Hypercom would purchase the e-Transaction business line of Thales for $120 million in cash with a potential earn out of up to an additional $30 million based upon the combined companies' performance in 2008. Hypercom provided Thales with a binding offer on these terms.
Hypercom plans to finance the transaction with $60 million of the Company's existing cash on hand, combined with a $60 million investment from Francisco Partners. Under the terms of this financing, Francisco Partners would provide a Senior Credit Facility of $60 million and be granted a warrant to purchase approximately 10.544 million shares of Hypercom common stock at $5.00 per share.
The proposed transaction will be submitted to, and the companies will seek the opinion of Thales SA's Works Council employee representative bodies before entering into the definitive agreement.
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