The shares of NCR Corporation surged more than 10% to $34.75 per share, driven by the report that Blackstone and Carlyle joined forces to acquire the company.
Blackstone and Carlyle intend to make a $10 billion joint bid for NCR in a leveraged buyout, according to a report from Reuters based on information familiar with the matter.
NCR is a technology company providing solutions that allow businesses to connect, interact, and transact with customers. NCR manufactures cash registers and ATMs.
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Blackstone & Carlyle aims to beat other interested buyers
The report indicated that Blackstone and Carlyle decided to work together to acquire NCR to outbid other interested buyers. The sources said the auction for NCR is still several weeks away from completion.
Other private equity firms interested to acquire NCR include Apollo Global Management and Thoma Bravo. Other interested parties could form a consortium to compete in the bidding process.
According to the sources, there is no guarantee that the Blackstone & Carlyle group would win the auction. They added that it was also uncertain whether NCR would agree to a sale to any party. The sources requested anonymity because the sale process is private.
NCR has been exploring options
The management of NCR has been exploring option over the past few months amid pressure from shareholders.
Since last year, Marcato Capital, the activist hedge fund headed by Richard McGuire, has been pushing the company to review options to enhance shareholder value. The activist investor suggested that NCR could implement various strategic alternatives or management initiatives such as improving its capital structure or capital allocation. Marcato Capital has a seat on the board of directors of the company.
During the first quarter, NCR reported a 3% decline in revenue to $1.48 billion. Its non-GAAP earnings were $0.43 per share. The company ended the quarter with $24 million free cash flow.
NCR Chairman and CEO Bill Nuti commented that the company was “off to a good start in 2015” based on its quarterly performance. He added, “Our first quarter results were in-line with our expectations, and we improved execution across our organization.”