Goldman Sachs Comments on Proposed VeriFone/Hypercom Merger

Goldman Sachs is commenting on the proposed merger between VeriFone Systems, Inc PAY and Hypercom Corp. HYC. “While our model does not include any HYC-related impact, we previously stated that the proposed deal would contribute roughly $450 mn in annualized revenue (per CY11 consensus HYC estimates),” Goldman Sachs writes. “Applying our PAY (modeled) firmwide margin and tax rate, we estimate that the incremental revenue could drive $0.66 of EPS accretion in FY12 (our current FY12 EPS estimate is $2.00). Our conversations with investors indicate that expectations fall within the range of $2.75-3.00 for FY12 and around $3.50-4.00 for FY13 (vs. our consensus-equivalent $2.27).” VeriFone Systems closed Thursday at $46.64; Hypercom Corp closed at $9.59.