CPI Card Group Inc (PMTS)

History and Background

CPI Card Group Inc. was founded in 1984. It initially focused on manufacturing payment cards and has since expanded into various card-related solutions. It became a public company via an IPO and went through several ownership changes. CPI became a key player in the card manufacturing industry in North America. In January 2024, CPI Card Group was acquired by privately held Gemalto, now a Thales company.

Core Business Areas

• Payment Solutions: Manufacturing of credit, debit, and prepaid cards, including EMV chip cards, contactless cards, and dual-interface cards.
• Secure Card Solutions: Production of government IDs, access control cards, and other secure cards.

Leadership and Structure

Prior to the acquisition, the leadership team consisted of the CEO, CFO, and other key executives. The organizational structure included various departments such as sales, marketing, operations, finance, and technology. Now it is part of Thales.

Key Offerings

• EMV Chip Cards: CPI is a major manufacturer of EMV chip cards for financial institutions. Market share data is difficult to ascertain precisely as the card manufacturing market is fairly opaque and varies by client. Major competitors include Giesecke+Devrient (private), and Thales (Euronext: HO). Competitors also include smaller regional card manufacturers.
• Contactless Cards: CPI produces contactless payment cards using NFC technology. Market share data is hard to find due to a lack of specific metrics. Major competitors include Giesecke+Devrient (private), Thales (Euronext: HO). Competitors also include smaller regional card manufacturers.
• Dual-Interface Cards: CPI offers cards that support both contact and contactless payments, allowing for maximum convenience and security. Market share data is hard to find due to a lack of specific metrics. Major competitors include Giesecke+Devrient (private), Thales (Euronext: HO). Competitors also include smaller regional card manufacturers.

Industry Overview

The card manufacturing industry is characterized by consolidation and increasing demand for secure payment solutions. EMV migration and the rise of contactless payments have been key drivers. The industry is heavily influenced by regulations, cybersecurity concerns, and evolving payment technologies.

Positioning

Prior to the acquisition, CPI was a leading player in the North American card manufacturing market, known for its scale, technology, and customer relationships. CPI benefited from being a vertically integrated company. CPI's ability to create cards quickly gave them the competitive advantage

Total Addressable Market (TAM)

The global market for payment cards is estimated to be in the billions of dollars annually. CPI had a notable share of the North American portion. With the acquisition by Thales, CPI is now part of a larger organization with a broader global reach.

Key Competitors

• Giesecke+Devrient
• Thales (Gemalto)

Competitive Landscape

CPI was a major player in the North American market but faced competition from larger global players. CPIu2019s strengths included its vertically integrated manufacturing capabilities and strong customer relationships. Thales brought broader global reach and additional technology capabilities.

Gemalto (Thales)

• Year: 2024
• Acquisition Price (USD millions): Disclosed, but part of a larger transaction
• Strategic Rationale: The acquisition of CPI Card Group by Thales (formerly Gemalto) significantly expanded Thales' presence in the payment solutions market and improved their scale of economies.

Historical Growth: Prior to the acquisition, CPI experienced growth driven by the EMV migration and the increasing popularity of contactless payments. However, growth was also affected by economic conditions and competition.

Future Projections: Future projections for CPI are now integrated with Thales' overall performance. It is not possible to separately forecast CPI's growth.

Recent Initiatives: Recent initiatives included expanding its product offerings, investing in new technologies, and strengthening customer relationships.

CPI Card Group Inc. was a significant player in the North American card manufacturing market before being acquired by Thales. Its strength lay in its strong customer relationships and vertically integrated manufacturing. CPI faced threats from larger global competitors and technological disruptions. Now as part of Thales, its strengths can be magnified, and its weakness reduced.

• Giesecke+Devrient
• OT
• IDEMIA
• HID Global

Data Sources:

• Company filings (prior to acquisition)
• Industry reports
• News articles
• Analyst reports

Disclaimers:

This analysis is based on publicly available information and is for informational purposes only. It does not constitute investment advice. Market share data is approximate and based on estimates. The financial data is prior to the acquisition by Thales and is subject to change.