Deutsche Bank Has Hold on Verifone

Deutsche Bank is out with a research report on Verifone

and it has a Hold rating and a $40 price target on shares. In a note to clients, Deutsche Bank writes, "Earlier today, PAY announced the acquisition of Point, a POS software ser- vice provider with data analytics, card encryption, e-commerce processing, loyalty programs, and other services in Northern Europe. PAY will pay €770m (~12.4x CY12 EV/EBITDA) through $1.6bn in committed financing that it intends to begin raising after Thanksgiving. PAY expects the transac-tion to generate ~$260m in NTM sales (bringing total services rev to over 30% of sales in FY12), add 1-2 points to op margins, reduce the non-GAAP tax rate from 20% to 18%, and add $0.08-0.10 to FY12 non-GAAP EPS (coming in 2H12) and $0.30-0.35 to non-GAAP FY13 EPS (acceleration from synergies and rev growth). The deal should close by the end of Dec 2011 (no antitrust issues in our view) and the company plans to release prelimi- nary 4Q11 results around Nov 28. We maintain our Hold rating." Shares of PAY are up $3.46 to $44.25, a gain of 8.48%.