FINANCE

Study: M&A activity in retail mobile payments rises

BY Dan Berthiaume

Greenwich, Conn. – Merger and acquisition (M&A) dealflow in the retail mobile payment sector has risen 500% between 2009 and 2013, while investment dealflow has grown 300%. According to data from Mooreland Partners, a mid-market investment bank specializing in technology deals, there were 232 M&A deals in this sector from 2009-213, and 259 from 1999-2013.

In addition, deals of less than $500 million have grown in the past three years, while use of handhelds for mobile POS are expected to see a 380% Compound Annual Growth Rate (CAGR) from 2013-2017. Mooreland data also shows that POS change will be accelerated by the Europay, Mastercard Visa (EMV) chip-based card payment liability deadline of October 2015 and the end-of-life of Windows XP. And as retailers upgrade POS, they are seeking seamless “omnichannel” solutions.

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FINANCE

Zale Q3 net earnings soar as sales fall

BY Dan Berthiaume

Dallas – Zale Corp. reported net earnings of $9 million in the third quarter of fiscal 2014, an impressive 80% jump from $5 million a year earlier. This soaring growth came even as revenues slipped 3% to $431 million, from $443 million.

A lower cost of sales and higher pretax earnings and operating earnings helped boost Zale’s net earnings. Zale cited the net decrease of 78 stores compared to the prior year and a decline in the Canadian exchange rate, partially offset by same-store sales growth of 1.9%, as driving down revenues.

Zale has also sent a letter to TIG Advisors, a hedge fund that has been openly opposing Zale’s proposed merger with Signet Jewelers. The letter stated that Zale believes the $21 per share Zale shareholders will receive reflects fair market value, financial targets of the transaction are achievable, and that Zale shareholders will obtain long-term value. Zale has scheduled a special meeting of stockholders for Thursday, May 29 to vote on its proposed acquisition by Signet.

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Swift Communications invests in digital marketing provider Engage3

BY Dan Berthiaume

San Francisco – Swift Communications, a multi-platform publisher based in Carson City, Nevada, is making a strategic investment in Engage3, a retail intelligence and digital marketing solution provider. The two companies are also working together to identify retailer and supplier partners in the markets Swift serves to drive additional consumer value.

The amount of the investment, which closed earlier this month and will be used to expand the features of Engage3’s solutions, was not released.

Engage3’s flagship application, ShoppingScout, helps consumers find information on brands and retailers, and receive promotional offers while they read digital and print media. Engage3 uses algorithms to determine the shopper’s intent-to-buy and makes that information available to partnering users so they can influence the process.

“We are very pleased to have Swift Communications as an investor and a partner, and see it as a validation of our efforts to provide a better shopping experience for consumers,” said Ken Ouimet, CEO of Engage3. “The additional capital will be well-spent improving our solutions and capturing the interest of retailers and suppliers.”

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