NCR to Repurchase Up to $1 Billion in Common Stock
DULUTH, Ga.--(BUSINESS WIRE)--Nov. 12, 2015--
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.
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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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151112005689/en/
Source: NCR Corporation
NCR Corporation
Lou Casale, 212-589-8415
lou.casale@ncr.com
or
Investor
Relations:
NCR Corporation
Gavin Bell, 212-589-8468
gavin.bell@ncr.com