M&A Alert—November 3, 2011
VeriFone Acquires Global Bay Mobile Technologies
Transaction Size: $27.5mm
Global Bay Mobile Technologies provides a mobile retail software platform that can be custom-configured and seamlessly integrated into merchants’ existing POS, CRM, eCommerce and traditional store systems. Merchants use Global Bay to give employees the ability to access their POS and inventory information on their mobile devices. Merchants can also use Global Bay’s platform to offer a mobile retail kiosk to interact with customers and offer loyalty rewards, promotions/coupons, customer surveys and videos/commercials via mobile applications. In addition, Global Bay offers a mobile clienteling application that enables store associates to move freely around the store and assist customers on a personalized level by understanding customers’ purchase history, scheduling tasks/appointments and making relevant purchase recommendations. Global Bay’s platform is compatible with Apple, Windows, Android and BlackBerry devices. Global Bay was founded in 2002 and is based in New Jersey. Global Bay was co-founded by Sandeep Bhanote and Nimit Sabharwal. Bhanote, CEO of Global Bay, has been appointed general manager of VeriFone’s Mobile Retail Systems business. Sabharwal, Global Bay vice president, has been appointed senior director of operations. Global Bay’s staff will join VeriFone’s Mobile Retail Systems division.
VeriFone offers products and technology that enable merchants to accept secure payments. Traditionally known as a provider of POS payment card readers, VeriFone has recently launched mobile payment offerings including a NFC-enabled payment reader (in partnership with Google) and PAYware (a Square-like mobile payment card reader). VeriFone also offers VeriFone Media, an interactive platform inside taxi and at gas stations, enabling advertisers to reach customers with relevant coupons and product offerings. VeriFone and other POS payment system providers have been experiencing competition from a host of emerging payment vendors such as Square, PayPal, Intuit, ROAMPay, Erply and PayAnywhere. PayPal, traditionally known as online payment specialist, announced its plan for in-store POS system and launched x.commerce payment platform to facilitate the convergence of social, local & mobile commerce.
Transaction value is not disclosed. UPDATE: Verifone paid $27.5mm according to subsequent SEC disclosures. Recent transactions in the mobile commerce sector include eBay’s acquisitions of Magento in June 2011, GSI Commerce for $2b in March 2011 and Milo for $75mm in December 2010 and Raymark’s acquisition of Retaligent in June 2011.
Global Bay fits with VeriFone’s strategy to integrate mobile retailing and payments solutions. Not only does Global Bay enhance and differentiate VeriFone’s mobile (smartphone and tablet) payment solutions with a suite of valuable commerce applications but, importantly, it creates an opportunity for VeriFone (and its merchant customers) to engage with customers earlier in and throughout the in-store shopping process. The customer engagement opportunities and insight gathered through this engagement creates many targeted marketing opportunities, such as: recommendations, promotions, loyalty rewards, etc.
Architect Partners’ Observations
We are still early on in the formation of the mobile payments ecosystem. Most of the attention has been around new (and newer) players such as Google, Square, eBay/PayPal, Visa, etc. and their efforts to use mobile phones and other connected devices to disrupt the incumbent payment and POS landscape. However, the incumbents will not be so easy to displace given their substantial resources, legacy relationships and deep enterprise integration. Additionally, they will move to extend their core offerings, as VeriFone has done, with the very same consumer-oriented services and new merchant marketing opportunities the newcomers are looking to capitalize on.