Blackstone Taking $820 Mil Stake in NCR Corp.

Cash register and ATM maker NCR Corp. confirmed publicly on Thursday that private equity firm Blackstone Group is taking an $820 million stake in the historic firm after a lengthy and ultimately unsuccessful effort to sell itself.

In its statement, NCR announced it will use Blackstone’s investment, which will give the well-known PE firm a 17% interest in NCR, to purchase around $1 billion of its shares beginning November 13th of this year.

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According to the press release, NCR is also expanding its Board of Directors from 9 to 11 and appointing Chinh Chu, Senior Managing Director, and Greg Blank, Managing Director, of Blackstone to the NCR Board, effective upon the closing of the transaction.

The deal is anticipated to be completed by the end of the year.

Statement from NCR

“After concluding a comprehensive review of strategic alternatives, the NCR Board has determined that executing our strategic plan with Blackstone’s assistance is the best way to accelerate NCR’s transformation and build long-term shareholder value,” commented NCR Chairman and CEO Bill Nuti.

He continued to note: “Blackstone is an experienced technology investor with a long-term perspective that can help us continue to drive our higher-margin software-related revenue, deliver world-class service globally, optimize our manufacturing processes and supply chain, and rationalize costs. This investment is a strong vote of confidence in our long-term strategy and future growth potential, and it will enable NCR to return significant cash to those shareholders who want to monetize their investment in the near term while preserving our ability to fund growth opportunities and increase shareholder value in the years ahead.”

More on Blackstone investment in NCR

Industry analysts point out that the agreement comes after Blackstone and other private-equity firms sought a leveraged buyout of NCR, which holds over $3 billion of debt as of September. It would have been one of the largest recent LBOs (which have been hobbled recently due to regulatory and other headwinds), but the parties just could not make the mumbers work.

NCR was founded in 1884, and manufactures so point-of-sale devices as well as cash registers and cash dispensing machines. The firm has been hurt by lower demand over the last year or so as retail customers gravitate toward mobile-payment devices such as Apple Pay or Square.

Of note, NCR shares have lost around half of their value after hitting a high in mid-2007.