Verifone to invest up to $300m in Israel after merging with Lipman
Deal expected to close next month and to create about 1,000 R&D and production jobs in Israel
Verifone means to invest up to $300 million in Israel pursuant to acquiring Lipman Electronic Engineering (TASE, Nasdaq: LPMA), say sources in the know of the American company's investment program.
The merger with Lipman, which makes electronic payment systems, is to close next month. The additional investment would be slated to expand the merged Verifone-Lipman R&D and production, say the sources.
On Tuesday, representatives of Verifone and Lipman will be meeting with Prime Minister Ehud Olmert to discuss the investment plan, which could create about 1,000 jobs in Israel.
Lipman and Verifone, which plan to make their investment in the Jerusalem area, could be eligible for a 15-year tax exemption, as a merged entity owned by a foreign body.
Unlike many companies that acquire local firms only to move most of their operations abroad, Verifone means to turn Israel into its R&D hub and to carry out production locally as well, based on the qualities of Israeli R&D.
Verifone, which is worth about $ billion on Nasdaq, signed the agreement to acquire Lipman in April for $793 million, about half in cash and half in stock. After the merger Lipman will be delisted and Verifone will dual-list in Tel Aviv.
In the U.S., Verifone commands about 20% of the market for smart card terminals.