NCR gets an $820 million investment from Blackstone

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NCR will receive an $820 million injection of cash from Blackstone, money that the company says it will use to reshape itself.

The announcement, coming a week after NCR broke ground on a new headquarters in Midtown Atlanta, is aimed at accelerating an “ongoing strategic transformation into an integrated software and services company,” according to a statement released by NCR.

The investment will have no impact on company plans to build its new headquarters in Atlanta and expand to 3,600 employees, said Kathy Damiani, NCR vice president.

“Not in the least bit, we are there to stay,” she said. “It is shining star. It is a significant commitment.”

She declined to say how many employees the company now has in the area.

NCR, founded in Dayton, Ohio in 1884, made its name as a maker of cash registers and more recently, computers. The company, which moved to Duluth in 2009, now makes automatic teller machines, kiosks and “point-of-sale devices,” but has struggled as customers move to payment with phones.

The company, which has about 29,000 employees, has lost about half its share value since peaking in 2007.

In a written statement earlier in the day, Bill Nuti, NCR’s chairman and chief executive, said the Blackstone money is essential to remaking the company.

“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,” said Nuti’s statement.

Those “strategic alternatives” are believed by analysts to include a failed attempt to sell the company, although the company Thursday declined comment a potential takeover.

In June, Reuters and others reported that Blackstone and the Carlyle Group had prepared a $10 billion joint bid for NCR, with other buyout firms also interested. But none of those takeovers materialized.

“I think that NCR did try to have a bigger transaction and they settled on this one,” said Kartik Mehta, analyst for Northcoast Research, a Cleveland-based equity research firm in Cleveland. “This is an interesting move. Whether it is good or bad, we don’t know for a while. But this transaction will get them expertise from another company.”

The company’s shift to services and software might mean job cuts and other “efficiencies,” Mehta said. “But if there are job cuts, I don’t think it will be because of this investment.”

NCR said it is “on track” to achieve about $70 million in savings this year, but declined to address the question of job cuts.

The Blackstone investment gives ill translate into a minority stake in NCR, giving Blackstone about 17 percent ownership. The deal also calls for two Blackstone representatives to be added to the NCR board of directors.

Blackstone is a global player with investments in a range of markets. For example, in the aftermath of the housing crisis, an arm of the company bought thousands of homes in metro Atlanta – some of which were sold to another company a few months ago.

 

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