Magazine article American Banker

Hypercom Files for $11M-Share IPO

Magazine article American Banker

Hypercom Files for $11M-Share IPO

Article excerpt

Hypercom Corp., which is second to Verifone Inc. in the point of sale terminal business, said Friday that it filed with the Securities and Exchange Commission for an initial public offering of 11.25 million shares.

The IPO, if given the green light by regulators, would make the New York Stock Exchange-traded company the only "pure play" in point of sale devices. Verifone was acquired this summer by Hewlett-Packard Co.

Phoenix-based Hypercom selected Lehman Brothers to lead its offering, with Salomon Brothers and Cowen & Co. participating. It is expected to be priced within two months and to fetch about $18 a share.

Executives involved in and close to the offering declined to comment in deference to the customary "quiet period."

Observers said the stock offering could give Hypercom access to capital that can help it diversify. Another likely outcome would be to raise the profile of a company that had been relatively free of the glare of public financial accountability.

"Hypercom was never really able to be a large-scale competitor to Verifone," said John Backus, president and chief executive officer of Intelidata Technologies Inc., Herndon, Va.

He said Hypercom and investment bankers may view the IPO as "an opportunity to change the competitive landscape."

According to the prospectus filed with the SEC, Hypercom plans to use proceeds to repay $21 million of debt and to fund $20 million of facilities expansion.

In addition, it expects to put a portion of the funds into the development of products and services for smart cards. …

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