NCR Confirms $820 Million Blackstone Investment
November 12 2015 - 8:20AM
Dow Jones News
ATM maker NCR Corp. confirmed Thursday that Blackstone Group LP
will invest $820 million into the company after its effort to sell
itself foundered.
NCR said it plans to use Blackstone's investment, which will
give the private-equity firm a stake of about 17% in NCR, to buy up
to $1 billion of its shares starting Nov. 13.
The deal is expected to close by early December. The Wall Street
Journal reported the talks Wednesday.
Blackstone will receive convertible preferred shares that pay a
5.5% dividend. The preferred shares are convertible to regular
stock at $30. The firm will also get two board seats in exchange
for the investment.
NCR stock closed Wednesday at $26.78, giving the Duluth, Ga.,
company a market value of $4.5 billion.
The agreement comes after Blackstone and other private-equity
firms vied for a possible leveraged buyout of NCR, which carried
more than $3 billion of debt as of September. That would have made
it one of the largest recent LBOs, the pace of which has been
slowed by regulatory and other headwinds.
NCR, founded in 1884, makes cash registers and other so-called
point-of-sale devices in addition to cash machines. The company has
struggled with lower demand as retail customers gravitate toward
mobile-payment devices such as Apple Inc.'s Apple Pay. NCR stock
has lost more than half its value from a 2007 high.
Blackstone is betting in part on a revival in NCR's software
business, which powers kiosks that accept mobile payments and
self-checkout lanes at many retailers, people familiar with the
matter said.
The deal would be an example of a so-called private investment
in public equity. Known as PIPEs, they are sometimes used as a
fallback when a company strikes out on a full sale, and can serve
as a source of cash to help facilitate strategic or other changes.
In 2014, shoe maker Crocs Inc. took a $200 million investment from
Blackstone after abandoning an effort to sell itself.
The Wall Street Journal reported in April that NCR was exploring
strategic options including the spinoff or sale of assets or a
return of cash to investors through a dividend or share
buyback.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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(END) Dow Jones Newswires
November 12, 2015 08:05 ET (13:05 GMT)
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