NCR, a provider of leading enterprise technology to banks, retailers and restaurants, has unveiled its board of directors unanimously agreed on a plan to split the firm into two independent, publicly traded companies.
After the separation, one of the publicly traded companies will focus on digital commerce, while the other will focus on ATMs.
The split-up is aimed to be structured in a tax-free manner and is expected to be completed by the end of 2023.
NCR board of directors executive chairman Frank Martire said: “It has become clear that NCR has the opportunity to unlock value for our shareholders by separating our digital commerce business and our ATM business.
“We have made significant strides over the past four years in creating a leading software-as-a-service business while continuing to strengthen and grow the ATM business.
“By creating two best-in-class independent companies, we should be able to accelerate the pace of transformation by enabling each to execute its own growth strategies and better capture the value-creation opportunities ahead.
“Throughout the strategic review process, we received material interest in a whole company sale of NCR, as well as interest in various individual segments of our business.
“In recent days, it has become increasingly clear to the Board that, given the state of current financing markets, we cannot deliver a whole company transaction that reflects an appropriate and acceptable value for NCR to our shareholders.”
The digital commerce company will use NCR’s software-led model to transform, connect and operate global retail, hospitality and digital banking.
It will expand common solutions to advance innovation and streamline operations.
The company will also reinvest in the business to expedite growth and recurring revenue.
The ATM entity will be a cash-generative business aimed to provide ATM as a Service to a large, installed customer base across banks and retailers.
It will also continue shifting to a highly recurring revenue model to drive stable cash flow and capital returns to shareholders.
NCR CEO Michael Hayford said: “This announcement is the right next step in NCR’s transformation. The separation would create two strong companies at scale, each with distinctive business goals and capital structures and allocation, as well as increased flexibility to innovate.
“Each company can simplify its operations and focus on what it does best, and because they will have different growth profiles and economic models, separating them will also provide investors with greater transparency and a better ability to value each of the businesses.
“And, importantly, we believe this approach will put us in the best position to drive the most competitive products and solutions for our customers.”
The spin-off will follow the satisfaction of customary conditions, including the effectiveness of appropriate filings with the US Securities and Exchange Commission, and the completion of audited financials.
