Alex Meruelo Announces 5.45% Ownership Stake In VeriFone Systems, Inc.

LOS ANGELES, Sept. 9, 2014 /PRNewswire/ -- Alex Meruelo, together with Meruelo Investment Partners LLC, and certain other affiliates, disclosed an ownership stake of 5.45% in VeriFone Systems, Inc. (NYSE: PAY) in a Schedule 13D filing with the Securities and Exchange Commission, dated September 8, 2014. In addition, Mr. Meruelo and Meruelo Investment Partners LLC, delivered the following letter to the board of directors of VeriFone Systems, Inc.:

"As disclosed in our public filing today, I am now the largest individual shareholder of VeriFone Systems, Inc., via Meruelo Investment Partners LLC, and along with certain other affiliates. We were the largest shareholder of Hypercom Corporation prior to the completion of Hypercom's merger with VeriFone in 2011. We established our investment in Hypercom in 2007. Following that merger, we maintained an ownership stake in VeriFone, and have subsequently increased our ownership significantly.

We are long-term investors seeking constructive relationships with boards and management teams in order to maximize value for all shareholders. In addition, through a number of our affiliates, we are owners and operators of a number of businesses in a variety of industries, and are not merely financial engineers seeking short-term profiteering.

We greatly value our investment in VeriFone and have supported the company through and since the Hypercom merger.  We applaud the board of directors for the swift action you took in March 2013 to replace Mr. Douglas Bergeron when it became apparent that he had lost the confidence of shareholders due to a lack of vision and a failure to deliver superior performance, as evident in the performance of the stock. You also had our full support in selecting Mr. Paul Galant as the CEO, and in implementing corrective measures that have improved operational and financial performance, and have resulted in outstanding performance of the stock price. We are also very encouraged by yesterday's earnings announcement, with the company not only beating revenue and earnings estimates, but also raising the full-year revenue forecast for the third time. 

Yet despite the upward trajectory that the company has experienced under your guidance, and the improvements made by management over the last 12-18 months, we feel compelled to share with you our concern that VeriFone remains greatly undervalued. We point out in particular the performance of one of VeriFone's leading competitors, Ingenico Group. In comparison to VeriFone, Ingenico has maintained superior operating margins, while similarly boosting revenue and earnings. We firmly believe that the company has significant upside potential yet to be realized, and that the company's current stock price does not yet fully reflect the company's long-term earnings potential. As such, we look forward to establishing a constructive relationship with you and management, and hope to work together to maximize value for all shareholders.

We hereby request a meeting with you and management to discuss our support, and to work with you to maximize value for all shareholders.  We are committed to VeriFone's success, and are willing to meet and discuss potential strategic alternatives and other matters with management and the board of directors at any time.

Thank you for your prompt consideration of these matters.  We look forward to working with you."

​​​​​​About the Meruelo Parties

Meruelo Investment Partners LLC acts as an investment adviser or manager to other persons and accounts and may be deemed to beneficially own securities owned or held by or for the account or benefit of such persons and accounts. The principal business of Meruelo Investment Partners is serving as an investment adviser or manager to other persons and accounts.

Alex Meruelo is the trustee of Alex Meruelo Living Trust and Managing Member of Meruelo Investment Partners LLC and may be deemed to control, and beneficially own securities owned or held by, Meruelo Investment Partners LLC. The present principal occupation of Mr. Meruelo is serving as the principal of the Meruelo Group. Meruelo Group is a privately-held management company serving a diversified portfolio of affiliated entities with interests in banking and financial services, food services (manufacturing, distribution, and restaurant operations), construction and engineering, hospitality and gaming, real estate management and development, media (television and radio), and public and private equity investing.

About any Possible Proxy Solicitation

Although we are not currently soliciting proxies for any annual or special meeting of stockholders of the Company, we reserve the right to do so. If we elect to solicit proxies in the future, we will file a proxy statement and other soliciting materials with the SEC and advise security holders to read the materials (when they become available) because they will contain important information. Security holders will be able to obtain any such materials (when they become available) for free at the SEC's web site at http://www.sec.gov or from us using the contact information provided herein or in such materials.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to factors that could cause actual results to differ materially from expected results, including assumptions that may not be correct or accurate due to risks related to the Company and other parties, circumstances, and conditions we cannot control or predict, the inherent uncertainty of future events, and other factors that may cause us to change our plans.

CONTACT:
Xavier A. Gutierrez
President & Chief Investment Officer
Meruelo Investment Partners LLC
(562) 745-2339
[email protected]

SOURCE Meruelo Investment Partners