NCR is making a major change to its corporate structure.
NCR Corp. is splitting into two independent, publicly traded companies.
The enterprise technology provider’s board of directors has unanimously approved a plan to divide NCR into one company focused on digital commerce, with the other company on ATMs. The separation is intended to be structured in a tax-free manner and is targeted for the end of 2023.
According to NCR, the digital commerce company will be positioned to leverage NCR’s software-led model to transform, connect and run global retail, hospitality and digital banking businesses, using common solutions to boost operational efficiency. The company says it will also reinvest in the business.
The ATM company will be positioned to focus on delivering cloud-based ATM as a service to NCR’s installed customer base across banks and retailers. It will leverage new ATM transaction types, including digital currency solutions.
“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,” said Michael D. Hayford, CEO of NCR. “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.”
“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,” said Frank R. Martire, executive chairman, NCR Board of Directors.
“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 separation transaction will follow the satisfaction of customary conditions, including appropriate filings with the U.S. Securities and Exchange Commission, and the completion of audited financials.
The NCR Board of Directors engaged BofA Securities, Inc., Goldman Sachs & Co. LLC, and Evercore Group L.L.C. as financial advisors during the strategic review process. Headquartered in Atlanta, NCR has 38,000 employees globally.