Verifone CEO Galant to step down as private equity takes over
Paul Galant will leave the CEO post at Verifone in the next few months, following a tenure in which he helped diversify and automate Verifone's merchant acquiring business and led a recovery from a series of strategic and economic missteps.
Michael Pulli will replace Paul Galant as CEO of Verifone when its $3.4 billion deal with Francisco Partners closes. The private equity firm announced in April that it would take Verifone private in a deal that is scheduled to close during the third quarter.
Pulli has served as CEO of Pace plc, a U.K.-based broadband company that was acquired by Arris, and has served in several positions in the wireless industry.
"Pulli has a legacy of maximizing value and finding the right acquirer for a company with a hardware focus," said Richard Crone, a payments consultant, adding Pulli would likely fulfill the common PE acquisition strategy of preparing a company for an eventual sale in the long term. "That's what he did at Pace."
Galant will remain with Verifone as Vice Chairman and will be a senior advisor on payment strategy to Francisco Partners, according to a release. Verifone did not return a request for comment on Monday afternoon.
"There is always a lot of pressure on finding the right leadership in a company that finds itself on the saturation stage. Verifone at its roots is a hardware company that has tried to add software an integrations on top of that," Crone said.
Galant, a former Citigroup executive who joined Verifone in 2013, oversaw Verifone's transition from what Galant called "self-inflicted wounds" such as poor financial returns, delayed technology projects, and illegal business deals in Iran.
Verifone diversified under Galant's leadership, adding more digital transaction capabilities to serve retailers under pressure to add e-commerce tools as Amazon and other online retail options began to squeeze traditional merchants.
Galant also led an effort to open Verifone's technology to third party developers to spot merchant innovation earlier in the cycle and further boost its mobile commerce strength.
The result was improved financial performance, enough to draw $3.4 billion from Francisco Partners, a deal that will make Verifone a cleanup hitter in a broad fintech lineup that includes mobile payment provider, mobile wallet company Paysafe and merchant services technology company NMI.
Verifone's attractiveness to Francisco is partly a testament to CEO Paul Galant's turnaround. Beyond Verifone's internal problems, it faced a growing market for mobile point of sale devices, spearheaded by Square.
Square's pitch was less about technology and more about ease of access — small merchants that didn't want to contend with Verifone's customer service issues could instead pick up a card reader at any convenience store for just $10. Verifone tried to match this with products like PayWare Mobile and Sail, but neither device reclaimed much ground against Square.
Verifone's turnaround was gradual, but in the past two years it has sharpened its move from payment terminal-based company to a software provider. The strategy is showing some effect, despite headwinds from the EMV migration, as CEO Paul Galant noted in the company's earnings report on March 8.
"If you look at all of the growth in the market, it's mobile with no hardware at all," Crone said. "That's the world Verifone needs to navigate to find value."