NCR may grab as much as $800 million in an investment from private equity giant Blackstone Group LP, The Wall Street Journal reported on Wednesday (Nov. 11).
A stake that size would garner Blackstone a 15 percent ownership in the ATM manufacturer, which had been up for sale, an event that never transpired.
[bctt tweet=”A stake that size would garner Blackstone a 15 percent ownership in the ATM manufacturer.”]
Quoting unnamed sources WSJ said were familiar with the mechanisms of the potential minority investment, a deal could come as early as this week. And, in addition, NCR is on track to announce a $1 billion buyback.
In reference to the structure of the deal, the sources said that Blackstone could take convertible shares at the preferred level of the capital stock and also get two board seats. The rumored price on the converts would be $30, compared to the roughly $26 a share seen for the common stock most recently.
WSJ reported that the agreement would be a bet by Blackstone that NCR will get a leg-up from its software business that is tied to mobile payments and kiosks, among other technologically advanced methods for payments that go beyond the traditional NCR ATM bastion.
This would be an investment known as a PIPE, a term for private investment in public equity. That investment, the publication noted, can be seen as one that typically could be defined as being spurred by failed takeout bids. As has been widely reported, NCR had garnered interest from Blackstone and other PE firms, but the $3 billion in debt on NCR’s books proved to be a deterrent in pursuit of a leveraged buyout, as were regulations. Therefore, a concrete agreement did not materialize. In the meantime, putting up the cash means that Blackstone can push through, or help design, NCR strategies going forward.
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