VeriFone mulling further $300m Israel investment
VeriFone Holdings, which is expected to complete its acquisition of Lipman Electronic Engineering next month, is considering expanding its investments in Israel by an additional $250-300 million dollars, according to sources familiar with the company's investment plan.
According to the sources, the potential future investment would be designed to expand the R&D activities of the merged companies, as well as their manufacturing operations. The companies specialize in readers for smart cards and credit cards as well as other forms of electronic payment.
The heads of VeriFone and Lipman will meet with Prime Minister Ehud Olmert today to discuss the investment, which is expected to create 1,000 local jobs. The companies, which are considering making the investment in Jerusalem, will be eligible for a 15-month tax exemption as a merged company under foreign ownership. In contrast to foreign firms that purchase companies in Israel and move most of their activities abroad, VeriFone is looking into making Israel its R&D center, as well as expanding its manufacturing operations here. The investment represents VeriFone's recognition of the technological superiority of Lipman and the Israeli engineers working in its area of expertise.
VeriFone, a U.S.-based company that trades according to a value of about $2 billion, signed an agreement last April to purchase Lipman for $793 million in cash and shares. After the merger, Lipman will be delisted and VeriFone will dual-list in Tel Aviv and the United States. In the U.S., Verifone commands about 20 percent of the market for smart card terminals.
Meanwhile, U.S. firm Guardian Industries will today be announcing a $50 million investment in the Galilee. The money will go toward retooling the Guardian-owned Phoenicia America-Israel Flat Glass factory to manufacture glass for solar-powered generating plants. William Davidson, the CEO and president of Guardian, is currently visiting Israel.
Phoenicia America-Israel president Oded Tyrah yesterday confirmed the news and said that Guardian had chosen Israel as its manufacturing center for hi-tech glass. He said the plan would save the plant, which is currently based on old manufacturing technologies.
"If the investment does not take place, the facility will probably close," Tyrah said, adding that the money would save the jobs of the 270 employees working at the factory now as well as create 80 new jobs.
Davidson and Tyrah are scheduled to meet today with Industry and Trade Minister Eli Yishai and Finance Minister Abraham Hirchson to present the investment plan.
"It's the first investment plan in the Galilee since the war, and there's a Zionist angle as well," Tyrah said.
He said the company has not yet decided whether to apply for tax benefits or a grant in connection with the investment. "Within one month, we will submit a request to the Israel Investment Center," Tyrah said.