NCR to Repurchase Up to $1 Billion in Common
Stock
NCR Corporation (NYSE: NCR) today announced that it has entered
into an agreement with Blackstone (NYSE: BX), one of the world's
leading investment and advisory firms, under which affiliates of
Blackstone will invest $820 million in NCR in the form of perpetual
convertible preferred shares. The Company expects its relationship
with Blackstone to accelerate NCR’s ongoing strategic
transformation into an integrated software and services company.
NCR will use the Blackstone investment to help fund a repurchase
through a self-tender of up to $1 billion of its common stock.
“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 NCR Chairman and CEO Bill Nuti. “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.”
In connection with the investment, NCR will expand its Board of
Directors from 9 to 11 directors and appoint Chinh Chu, Senior
Managing Director, and Greg Blank, Managing Director, of Blackstone
to the NCR Board upon the closing of the transaction, which is
expected to occur by early December.
Mr. Nuti continued, “We are delighted to welcome Chinh and Greg
to our Board. Blackstone has a well-deserved reputation as a strong
corporate partner, and we expect the Board will benefit from
Chinh’s and Greg’s strategic and financial expertise. NCR will
enjoy the full resources of Blackstone’s unique platform of
operational support and is well positioned to leverage Blackstone’s
global network as we look to expand our partnership network and
evaluate new growth opportunities.”
“NCR has made tremendous progress removing legacy barriers to
growth and executing a corporate transformation focused on
extending its product capabilities into new areas of software and
services. NCR is well positioned to continue to win market share
and deliver exceptional value to its customers,” said Chinh Chu,
Senior Managing Director, Private Equity, at Blackstone.
“We are pleased to partner with NCR at such a pivotal time and
believe it has the right strategy and vision to meet the needs of a
rapidly changing market,” said Greg Blank, Managing Director,
Private Equity, at Blackstone. “Chinh and I look forward to working
with the NCR Board and management team to increase value for all
shareholders.”
Accelerating NCR’s Transformation and
Supporting Growth
Blackstone is an experienced investor with proven technological
and operational expertise, and the strategic relationship will
provide significant resources to enable NCR to:
- Grow recurring revenue through software
development and services initiatives and a continued transition to
cloud-based offerings
- Improve services productivity and
customer satisfaction through a continuing shift to innovative,
higher-margin, value-added service offerings
- Expand margins through lean
manufacturing, product lifecycle management and procurement
processes
- Optimize hardware and supply chain
assets
- Preserve financial flexibility to drive
sustainable growth going forward.
NCR’s shareholders will be able to participate, along with
Blackstone, in the Company’s significant growth opportunities in
the rapidly expanding market for integrated solutions.
Share Repurchase
NCR intends to repurchase up to $1 billion of its common shares
through a modified “Dutch Auction” tender offer at an expected
price range between $26.00 and $29.50 per share expected to
commence November 13, 2015. The Company will fund the tender offer
with the proceeds of the Blackstone investment, cash on hand and
borrowings from its revolving facilities. Further details,
including the terms and conditions of the tender offer, will be
filed with the Securities and Exchange Commission.
Blackstone Investment
Terms
- Blackstone will purchase $820 million
of convertible perpetual preferred stock, which is convertible into
shares of NCR common stock at a conversion price of $30.00 per
share.
- The conversion price represents an 18%
premium to the 30-day volume-weighted average price ended November
11, 2015.
- The preferred stock carries a 5.5%
dividend, which will be payable in kind for the first four years
following issuance.
- On an as-converted basis, the preferred
stock will represent approximately 17% of NCR’s shares outstanding
after giving effect to the Blackstone investment and share
repurchase (assuming the tender offer is fully subscribed at the
midpoint of the price range).
- Blackstone may convert the preferred
into common at any time and may require NCR to repurchase the
preferred after 8-1/2 years and every 3 years thereafter. The
preferred will be mandatorily convertible into common if the stock
price exceeds certain thresholds.
Additional information regarding the investment will be included
in a Form 8-K to be filed today by the Company with the Securities
and Exchange Commission.
“This long-term equity investment is an attractive security that
will benefit our company and shareholders alike,” said NCR CFO Bob
Fishman. “The strategic partnership with Blackstone, which supports
our long-term strategy, enables us to repurchase a significant
amount of our common stock in the short term, while the terms of
the investment preserve our balance sheet flexibility.”
Director Biographies
Chinh Chu is a Senior Managing Director of Blackstone in the
Private Equity Group based in New York. He has led Blackstone’s
investments in AlliedBarton, Celanese, Graham Packaging, Interstate
Hotels, Kronos, LIFFE, Nalco, Nycomed, and Stiefel Laboratories.
Mr. Chu graduated with a bachelor’s degree in finance from the
University of Buffalo. He currently serves as a director of Biomet,
Freescale, HealthMarkets, and Kronos.
Greg Blank is a Managing Director of Blackstone in the Private
Equity Group based in New York where he focuses on investments in
the technology sector. Mr. Blank has been involved in the execution
of many of Blackstone's investments, including most recently in
Kronos, Ipreo, and Optiv. Mr. Blank graduated with a bachelor’s
degree in economics from Harvard College and received an MBA from
the Harvard Business School. He currently serves as a director of
Ipreo, Optiv, Travelport, and The Weather Company.
J.P. Morgan, Atlas Strategic Advisors and BofA Merrill Lynch are
acting as placement agents and financial advisors to NCR, and
Cravath, Swaine & Moore LLP is serving as NCR’s legal advisor
in the transaction.
Citi, Goldman, Sachs & Co., and RBC Capital Markets LLC are
financial advisors to Blackstone, and Kirkland & Ellis LLP is
Blackstone’s legal advisor in the transaction.
Conference Call
A conference call is scheduled for today at 8:00 a.m. ET to
discuss today’s announcement. Access to the conference call and
accompanying slides, as well as a replay of the call, will be
available on NCR's web site at http://investor.ncr.com/.
Additionally, the live call can be accessed by dialing
888-215-6853, or 913-981-5550 for international participants, and
entering the participant passcode 7924084.
About Blackstone
Blackstone is one of the world’s leading investment firms. It
seeks to create positive economic impact and long-term value for
its investors, the companies it invests in, and the communities in
which it works. Blackstone does this by using extraordinary people
and flexible capital to help companies solve problems. Its asset
management businesses, with over $330 billion in assets under
management, include investment vehicles focused on private equity,
real estate, public debt and equity, non-investment grade credit,
real assets and secondary funds, all on a global basis. Further
information is available at www.blackstone.com. Follow Blackstone
on Twitter @Blackstone.
About NCR Corporation
NCR Corporation (NYSE: NCR) is the global leader in consumer
transaction technologies, turning everyday interactions with
businesses into exceptional experiences. With its software,
hardware, and portfolio of services, NCR enables more than 485
million transactions daily across the financial, retail,
hospitality, travel, telecom and technology industries. NCR
solutions run the everyday transactions that make your life
easier.
NCR is headquartered in Duluth, Georgia with over 29,000
employees and does business in 180 countries. NCR is a trademark of
NCR Corporation in the United States and other countries. NCR
encourages investors to visit its web site which is updated
regularly with financial and other important information about
NCR.
Web site: www.ncr.com
Twitter: @NCRCorporation
Facebook: www.facebook.com/ncrcorp
LinkedIn: http://linkd.in/ncrgroup
YouTube: www.youtube.com/user/ncrcorporation
Forward-Looking Statements
This release contains forward-looking statements.
Forward-looking statements use words such as “expect,”
“anticipate,” “outlook,” “intend,” “believe,” “will,” “should,”
“would,” “could” and words of similar meaning. Statements that
describe or relate to NCR’s plans, goals, intentions, strategies or
financial outlook, and statements that do not relate to historical
or current fact, are examples of forward-looking statements.
Forward-looking statements are based on NCR’s current beliefs,
expectations and assumptions, which may not prove to be accurate,
and involve a number of known and unknown risks and uncertainties,
many of which are out of NCR’s control. Forward-looking statements
are not guarantees of future performance, and there are a number of
important factors that could cause actual outcomes and results to
differ materially from the results contemplated by such
forward-looking statements, including factors relating to: the
successful closing of the investment by Blackstone and achievement
of its potential benefits; domestic and global economic and credit
conditions, including, in particular, market conditions and
investment trends in the retail industry, and economic and market
conditions in China and Russia; the impact of our indebtedness and
its terms on our financial and operating activities; our ability to
successfully introduce new solutions and compete in the information
technology industry; the transformation of our business model and
our ability to sell higher-margin software and services; our
ability to improve execution in our sales and services
organizations; defects or errors in our products or problems with
our hosting facilities; manufacturing disruptions; collectability
difficulties in subcontracting relationships in emerging
industries; the historical seasonality of our sales; foreign
currency fluctuations; the availability and success of
acquisitions, divestitures and alliances, including the acquisition
of Digital Insight; our pension strategy and underfunded pension
obligation; the success of our ongoing restructuring plan; tax
rates; compliance with data privacy and protection requirements;
reliance on third party suppliers; development and protection of
intellectual property; workforce turnover and the ability to
attract and retain skilled employees; environmental exposures from
our historical and ongoing manufacturing activities; uncertainties
with regard to regulations, lawsuits, claims and other matters
across various jurisdictions; and the other risks and uncertainties
described in NCR’s filings with the Securities and Exchange
Commission (the “SEC”), including under the headings “Risk Factors”
and “Management's Discussion and Analysis of Financial Condition
and Results of Operations” in NCR’s annual report on Form 10-K for
the year ended December 31, 2014 filed with the SEC on February 27,
2015 and in any of NCR’s subsequently filed Form 10-Qs. Any
forward-looking statement speaks only as of the date on which it is
made. NCR does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Important Information
This release is for informational purposes only and is not an
offer to buy or the solicitation of an offer to sell any securities
of NCR. The tender offer described in this release has not yet
commenced, and there can be no assurances that NCR will commence
the tender offer on the terms described in this communication or at
all. If NCR commences the tender offer, the tender offer will be
made solely by an Offer to Purchase and related materials, which
NCR will file with the SEC. Investors are urged to read these
materials when they become available, as well as any other relevant
documents filed with the SEC when they become available, carefully
and in their entirety because they will contain important
information, including the terms and conditions of the tender
offer. If NCR commences the tender offer, it will file each of
the documents referenced in this paragraph with the SEC, and, when
available, investors may obtain a free copy of them from the SEC at
its website www.sec.gov, or free of
charge from NCR at http://investor.ncr.com or by directing a request
to Gavin Bell, Vice President of Investor Relations, at
212-589-8468 or gavin.bell@ncr.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20151112005689/en/
NCR CorporationLou Casale,
212-589-8415lou.casale@ncr.comorInvestor Relations:NCR
CorporationGavin Bell, 212-589-8468gavin.bell@ncr.com
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