VeriFone Systems (NYSE: PAY), announced today that it has accelerated its efforts to deliver end-to-end encryption solutions with the acquisition of encryption leader Semtek.
VeriFone previously invested in Semtek's equity funding. Semtek shareholders received VeriFone common shares that valued the acquired company at $18 million.
The acquisition, effective immediately, enables VeriFone to integrate the development, sales, implementation and support of end-to-end encryption solutions into the existing VeriFone organization to better fulfill customer needs, increase revenue and enhance support. Additionally, VeriFone is offering royalty-free software licenses to device manufacturers and payment processors to further spur market adoption.
"With increasing market demand for our VeriShield Protect end-to-end encryption solution, acquiring Semtek's core encryption technology ensures we can more effectively ramp up to meet customer demands and foster industry-wide acceptance of this critically important component to securing payment transactions," said VeriFone Executive Vice President Bud Waller.
VeriFone's initial investment in Semtek was announced in October 2007. In April 2008, VeriFone introduced VeriShield Protect, the first commercial offering of end-to-end encryption for payments, which incorporated Semtek technology.
VeriShield Protect has since been implemented across VeriFone's product line. The patented technology encrypts card holder information at the exact instant of acceptance, inside a secure, trusted device, and keeps that data encrypted throughout an enterprise, to ensure protection of information even in the event of a security breach.
Semtek will be absorbed into VeriFone's Integrated Systems organization.