The Justice Department on Thursday cleared VeriFone Systems Inc's

purchase of Hypercom Corp , after the companies found another buyer for its the point-of-sale terminals business, a private equity-backed group.

The Justice Department's antitrust division had sued to block the deal in May saying the first proposed buyer of that business, Ingenico , did not remedy competition concerns.

Hypercom and VeriFone collectively control more than 60 percent of the U.S. market for the terminals.

The companies abandoned the Ingenico deal and have since found an alternate buyer, a group backed by Gores Group LLC, the department said. The buyer will acquire the physical assets, employees, intellectual property rights and other assets.

The proposed sale of the Hypercom assets to Gores will create an independent and significant competitor in the United States, both right now and into the future, said Christine Varney, head of the Justice Department's antitrust division.

If for some reason that deal falls apart, a trustee will be empowered to sell the terminal assets to another buyer, the Justice Department said.

Shares of VeriFone were down 4.1 percent at $39.30 while Hypercom shares lost 3 percent to $8.86 in late morning trading on the New York Stock Exchange as stocks broadly lost over 2 percent due to growing concerns about the economic outlook.

(Reporting by Jeremy Pelofsky; Editing by Gerald E. McCormick and Tim Dobbyn)