The rating on San Jose, Calif.-based VeriFone Systems Inc. reflects its relatively short track record of operating performance at current levels, an acquisitive growth strategy, and technology risk within the rapidly evolving electronic payment solutions market. While there are near-term integration risks, we believe VeriFone will achieve operational and end-market synergies from the recent Hypercom acquisition. Based on its solid market position in its core products and new growth initiatives, we anticipate that VeriFone will continue to generate good revenue growth and consistent profitability while maintaining leverage below 3.0x over the intermediate term We consider VeriFone's business risk profile as fair, reflecting a relatively narrow position in the electronic payment solutions market, and the need to competitively respond to evolving
