June 18, 2015
According to Reuters, Washington-based PE giant Carlyle Group LP is said to be involved in a bid along with New York-based Blackstone Group LP to acquire NCR Corp. NCR Corp. manufacturers cash registers and ATMs. If the deal materializes, it will be this year’s biggest deal valued at more than $10 billion. Carlyle and Blackstone—the world’s two largest PE firms joining hands signifies an extreme combined market influence. Other firms vying for NCR include Apollo Global Management LLC and Thoma Bravo LLC.
The auction for NCR is quite some time away and there is no certainty that Blackstone’s and Carlyle’s consortium will triumph. There is a possibility that other PEs might also join hands, or that NCR may not agree to sell to any party after all. After this news broke out, NCR’s shares soared by $4.15 (or 13.2%) to $35.52 per share.
Georgia-based firm NCR Corp. was founded more than a century ago. While, NCR’s focus has majorly been on the development and distribution of hardware, the company recently launched a cloud-based enterprise software platform that moves the ATM online. The software called Kalpana is meant to reinstate obsolete PC software on ATMs. The company also makes self-checkout machines. Earlier this year, NCR Corporation also opened a new manufacturing facility in Chennai, India. Through this facility, the firm plans to bring innovative technologies to the market at a faster rate and expand to new avenues of growth like retail and hospitality. The facility is designed for lean manufacturing practices and has an output capacity of 100,000 ATMs per month.
With retailers (who are major customers of NCR) cutting costs, the company has faced a decline in revenue. In the first quarter of the year, the company’s revenue declined by 3% to $1.48 billion compared to a year ago. NCR has been exploring options in the recent months due to pressure from shareholders. On the other hand, since the last year, Marcato Capital had been emphasizing on exploring strategic alternatives itself and now, the company holds a seat in NCR’s board of directors. In addition, Jana Partners has also reported a 7% passive stake.