Verifone Rumored To Be Receiving Go-Private Interest

Courtesy of Benzinga.

On the strength of recent whispers of private equity interest in VeriFone Systems, Inc (NYSE: PAY), Credit Suisse performed a leveraged buyout model valuation to evaluate the potential value of a deal and possible return rates.

While the outcome of their analysis showed an attractive internal rate of return, Credit Suisse researchers saw no strategic justification for the deal. The lack of a real impetus for a go-private move, combined with concerns over VeriFone’s high leverage, could complicate any buyout talks.

The high leverage multiple that Credit Suisse’s estimated offer price would imply would make the deal a target for regulatory scrutiny, and going private was not seen as an effective way to expedite the successful completion of management’s restructuring initiatives.

Credit Suisse holds a Neutral rating and $24 price target on shares of VeriFone.

Posted-In: Credit SuisseAnalyst Color Analyst Ratings