With agreement to purchase Digital Insight and acquisition of Alaric
Systems, NCR will establish the most comprehensive suite of retail
banking solutions in the industry and deliver an unparalleled value
proposition for its financial services customers
DULUTH, Ga.--(BUSINESS WIRE)--Dec. 2, 2013--
Today, NCR
Corporation (NYSE: NCR), the global leader in consumer
transaction technologies, took the next step in the transformation of
its Financial Services business, announcing that it had entered into a
definitive agreement to purchase Digital Insight Corporation, a leader
in online and mobile banking solutions, for a purchase price of $1.65
billion, and that it had completed the acquisition of Alaric Systems
Limited, a provider of secure transaction switching and fraud prevention
software, for a purchase price of approximately $84 million. Digital
Insight is majority owned by Thoma Bravo, LLC.
Together, these companies complement and extend NCR’s existing
capabilities in the banking industry to form a complete enterprise
software platform that will deliver a unique and compelling consumer
experience across all digital and physical channels - mobile, online,
branch, and ATM. The combination will help retail banks and other
financial institutions reduce legacy costs and enable solutions for new,
more nimble branches, by providing one platform for omni-channel
services and all payment and transaction types.
Today’s announcement follows the successful acquisitions of Retalix and
Radiant Systems that have transformed NCR’s Retail and Hospitality
businesses by delivering revenue growth, improved profitability, and an
increased revenue mix of software and SaaS for NCR. The acquisitions of
Digital Insight and Alaric Systems continue a strategic plan of
transformative acquisitions across all of the company’s three core lines
of business and will enhance NCR’s existing capabilities, delivering the
industry’s most comprehensive suite of retail banking solutions.
"This is a historic day for NCR," said NCR chairman and CEO, Bill
Nuti. "For the past eight years, NCR has been executing a deliberate and
thoughtful strategic agenda to profoundly reinvent the company. Over
that time, we have orchestrated a patient balance between legacy issues
and growth initiatives that has led to delivering a compelling value
proposition for all of our stakeholders. Today represents a culmination
of many years of effort, particularly as it relates to what was once
NCR's core businesses. Today, we are fundamentally and permanently
changing our largest line of business, Financial Services. With the
announcements of our agreement to purchase Digital Insight and our
acquisition of Alaric Systems, NCR becomes a powerful, global FinTech
solutions provider enabling retail banks to deliver on the promise of
omni-channel capabilities – on top of an unparalleled, innovative
software platform."
Digital Insight, based in Menlo Park, California; and Alaric Systems,
based in London, U.K., together will uniquely position NCR to deliver an
enterprise software stack that securely and seamlessly creates a
differentiated consumer experience across all channels (online, mobile,
ATM, branch) improving a retail bank’s growth, profitability and
customer satisfaction.
With the addition of Digital Insight, NCR will also enhance its ability
to serve the mid-market retail banking segment, which includes Digital
Insight’s highly diversified customer base consisting of more than 1,000
financial institutions with 12 million online banking users and nearly
4.8 million mobile end users. The Digital Insight acquisition will also
provide an opportunity for NCR to offer its clients additional solutions
for mobile, bill pay and online banking.
“Together, NCR, Digital Insight and Alaric Systems are committed to
delivering value to financial institutions," said Andy Heyman, senior
vice president, NCR Financial Services. "We have an opportunity to
enable differentiated consumer experiences through safe, secure, and
integrated transactions across every banking touch point. We will help
financial institutions to reduce costs, serving as a single solutions
provider for ATM, branch, mobile, commerce and internet banking
services, as well as the payments and processing infrastructure behind
those experiences.”
Alaric Systems payments processing and fraud prevention software allows
financial institutions, processors and retailers to manage ATM, point of
sale, ecommerce and mobile payment or banking transactions, deliver
complex multi-channel payments integration and carry out enterprise
fraud and risk management. Alaric Systems powers more than 1.25 billion
transactions a month across 30 countries.
The Alaric Systems solution set includes the Authentic payments and
Fractals fraud prevention technologies. Authentic is a modern, ultra
high-performance authorization and routing system for managing
transactions from all channels across the enterprise, from ATM, point of
sale to ecommerce and mobile. Fractals is an intelligent fraud detection
and prevention framework designed to detect and intercept fraudulent
payment transactions before the transaction is completed.
The Digital Insight transaction is subject to the expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the satisfaction of
other and customary closing conditions and is expected to be completed
in the first quarter of 2014. Both the Digital Insight and Alaric
Systems transactions will be independently accretive to 2014 non-GAAP
EPS.(1)
RBC Capital Markets, LLC acted as lead financial advisor to NCR. J.P.
Morgan and BofA Merrill Lynch also acted as financial advisors and
Womble Carlyle Sandridge & Rice, LLP acted as legal counsel to NCR on
the Digital Insight transaction.
(1) NCR defines non-GAAP earnings per share as earnings excluding
pension and special items on a per share basis.
Investor Conference Call
A conference call is scheduled today at 5:00 p.m. (EST) to discuss the
acquisitions of Digital Insight and Alaric Systems. Access to the
conference call and an accompanying presentation describing the
transactions, 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 888-427-9411 and
entering the participant passcode 9976388.
The call replay can be accessed by dialing 888-203-1112 using replay
passcode 9976388. The call replay will be available starting at 8 PM ESTDecember 2, 2013 until 8:00 PM ESTDecember 9, 2013.
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 450 million transactions daily across
the retail, financial, travel, hospitality, telecom and technology
industries. NCR solutions run the everyday transactions that make your
life easier.
NCR is headquartered in Duluth, Georgia with over 26,000 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:
www.linkedin.com/company/ncr-corporation
YouTube:
www.youtube.com/user/ncrcorporation
Forward-Looking Statements
Note to Investors – This news release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements use words such as “seek,”
“potential,” “expect,” “strive,” “continue,” “continuously,”
“accelerate,” “anticipate,” “outlook,” “intend,” “plan,” “target,”
“believe,” “estimate,” “forecast,” “pursue” and other similar
expressions or future or conditional verbs such as “will,” “should,”
“would” and “could.” They include statements as to NCR's plans for the
businesses of Digital Insight and Alaric Systems; the strategic fit of
Digital Insight and Alaric Systems with NCR and its Financial Services
line of business, and their effects on NCR’s solutions portfolio;
expectations regarding trends in the financial services industry;
comments about future market or industry performance or behaviors; and
beliefs, expectations, intentions, and strategies, among other things.
Forward-looking statements are based on management's current beliefs,
expectations and assumptions and involve a number of known and unknown
risks and uncertainties, many of which are outside of our control.
Forward-looking statements are not guarantees of future performance, and
there are a number of factors, risks and uncertainties that could cause
actual outcomes and results to differ materially from the results
contemplated by such forward-looking statements. In addition to the
factors discussed in this release, these other factors, risks and
uncertainties include those relating to: domestic and global economic
and credit conditions, including the ongoing sovereign debt conditions
in Europe and the uneven global economic recovery; our indebtedness and
the impact that it may have on our financial and operating activities
and our ability to incur additional debt; the financial covenants in our
senior secured credit facility and the indentures for our senior
unsecured notes and their impact on our financial and business
operations; the adequacy of our future cash flows to service our
indebtedness; the variable interest rates borne by our indebtedness
under our senior secured credit facility and the effects of changes in
those rates; our ability to raise funds necessary to finance a required
change in control purchase of our senior unsecured notes; the effect on
our future borrowing costs and access to capital of a lowering or
withdrawal of the ratings assigned to our debt securities; shifts in
market demands, continued competitive factors and pricing pressures;
shorter product cycles, rapidly changing technologies and maintaining a
competitive leadership position with respect to our solution offerings;
manufacturing disruptions affecting product quality or delivery times;
the historical seasonality of our sales; the effect of currency
translation; our ability to achieve targeted cost reductions;
maintaining profitability of our professional services consulting
engagements and appropriate utilization rates for our consultants;
market volatility and the funded status of our pension plans; the
success of our pension strategy, including “Phase III” of our pension
strategy; tax rates; our ability to sell higher-margin software and
services in addition to hardware; business and legal risks associated
with multinational operations; availability and successful exploitation
of new acquisition and alliance opportunities; expected benefits related
to acquisitions and alliances, including the acquisition of Alaric
Systems and the proposed acquisition of Digital Insight, not
materializing; the timely development, production or acquisition and
market acceptance of new and existing products and services; the ability
of third party suppliers on which we rely being able to fulfil our
needs; our ability to successfully develop and protect intellectual
property that drives innovation; our ability to execute our business and
reengineering plans; turnover of workforce and the ability to attract
and retain skilled employees; compliance with requirements relating to
data privacy and protection; continued efforts to establish and maintain
best-in-class internal information technology and control systems;
exposure to post-closing liabilities resulting from the sale of assets
of our entertainment business; environmental exposures from our
historical and ongoing manufacturing activities; changes in GAAP and the
resulting impact, if any, on our accounting policies; uncertainties with
regard to regulations, lawsuits, claims and other matters across various
jurisdictions; and other factors detailed from time to time in NCR's
U.S. Securities and Exchange Commission reports and NCR's annual reports
to stockholders. NCR does not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Source: NCR Corporation
Investor Contact
Tracy Krumme
NCR Investor Relations
212-589-8569
tracy.krumme@ncr.com
or
Media
Contact
Jeff Dudash
NCR Public Relations
919-435-6976
jeff.dudash@ncr.com
