NCR Stocks Soar As Talks of Takeover Emerge

ATM manufacturer NCR Corp. (NCR) seems to be responding to its shareholders’ recent calls to go on sale. Blackstone and Carlyle, the world’s two largest private equity firms, are joining forces to acquire NCR, reports Reuters.

The buyout is said to be more than $10 billion, including debt. But there are still a few more weeks to let other buyers, such as Apollo Global Management LLC and Thoma Bravo LLC, to outbid the two private equities.

Following the outbreak of the news, NCR shares went from $4.15 or 13.2 percent to $35.52 per share. In the last year, NCR stock had fallen 11 percent and was trading below where it was 10 years ago. In this year’s first quarter, Reuter reports, NCR’s revenue declined 3 percent to $1.48 billion compared to a year ago. Free cash flow went up from a year ago and was at $24 million in the first quarter.

Duluth-based NCR currently has a value of around $5 billion. Since its creation of the first mechanical typewriter in 1884, NCR has been a standard part of the American retail experience. That experience has grown to include POS devices and the product the firm is most known for – ATMs. Lately however, the company has faced softening demand from retailers who are leaning increasingly away from traditional POS systems. The firm reported weak earnings last October and lowered its financial guidance. It recently added the founder of Marcato Capital Management (a shareholder) to its board, which has been known to be in favor of M&A activity.

So NCR has been embarking on a number of initiatives to diversify away from its traditional, ATM based product lines, and that includes a POS focus. In May it was launching NCR-owned Alaric’s latest version of Authentic, a transaction processing software, which can carry out more than 10,000 transactions per second. This month, it announced that Dunkin’ Donuts chain branched into Brazil using NCR’s Aloha POS software, with an eye on expediting orders, transactions and efficiency.

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