VeriFone chairman and CEO Douglas G. Bergeron arrived in Israel yesterday for a three-day visit during which he will meet Prime Minister Ehud Olmert and present VeriFone's plans for operation in the country after completion of its acquisition of Lipman Electronics Engineering (Nasdaq: LPMA; TASE: LPMA) . Bergeron will also meet with Investment Promotion Center director Hezi Zaieg, and with Ministry of Finance director general Joseph Bachar. On his first day here, (Monday) Bergeron cleared some of his time to meet with local analysts and investors.
Upon completion of the Lipman deal, shares of Lipman will be delisted from the Tel Aviv Stock Exchange (TASE) and Nasdaq, while VeriFone Holdings Inc. (NYSE:PAY) shares will begin to be traded on the TASE, directly on the Tel Aviv 25 Index. VeriFone, which has a market cap of $1.9 billion, will be the seventh largest company on the index.
Bergeron told "Globes" in an exclusive interview "We are in contact with the government of Israel for mutually beneficial cooperation. We hope that VeriFone will be able to inherit from Lipman the advantages which it established during the years of its operation, and to grow on the basis of our commitment to the Israeli economy, through exports and through the creation of jobs."
"Globes:" Where did the idea to move the company's manufacturing and R&D to Israel originate?
Bergeron: "VeriFone's revenues are expected in the next two years to reach one billion dollars. As a global company, it has manufacturing plants and R&D centers in several countries around the world. However, we intend to make our Israeli R&D center one of great importance for the company. We also plan to boost the manufacturing center in Israel."
In what stage are the negotiations with the Investment Center currently?
"First of all, the basis for the negotiations was the excellent work done by my colleague Lipman president and CEO Isaac Angel, and the rest of the Lipman management. The current dialogue between the parties revolves around what will happen if VeriFone increases its presence in Israel, how this will benefit the government, employees, VeriFone and its shareholders."
Naturally, the transfer of the company's manufacturing and R&D activity to Israel will create hundreds more jobs.
"Correct, Israel is known for the high quality of its R&D manpower. Also, one of VeriFone and Lipman's future growth engines will be cellular payment systems, and it's possible that some of the new employees will be diverted to this field."
Have you determined a limit to the number of added employees in Israel?
"No, but I can definitely tell you that, like in the rest of the world, the number of VeriFone employees will grow, subject to the growth of the company's market share, the number of its new products, and its level of penetration into new markets."
Upon completion of the acquisition, VeriFone will be traded on the Tel Aviv 25 Index as the seventh largest company on the index. As a result, you will have to dedicate some of your time to meet with local analysts and investors.
"That's right, and I look forward to it. I hope that during future visits to Israel I will have the opportunity to meet with them and to update them on what is happening in the company. I also hope that trading volumes in the share will be high. More specifically, maintaining the current high trading volumes and creating investor interest will be an important objective for us. Additionally, VeriFone will be a significant player in the Israeli economy in the long term, not just as a stock but as an employer."
Published by Globes [online], Israel business news - www.globes.co.il - on October 17, 2006
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