World’s largest private equity firms join forces

Private equity giants Blackstone and Carlyle partner offer $10bn to buy ATM-maker NCR

The Carlyle Group and Blackstone Group have joined up to purchase NCR. Their offer of $10bn may prove too tempting to the struggling ATM and checkout manufacturer 

The two biggest private equity firms in the world have made a joint bid of $10bn to acquire ATM and checkout manufacturer NCR Corp. The news of the possible acquisition by Blackstone Group and Carlyle Group has sent NCR’s share price soaring from $4.15 to $35.52 per share.  The $10bn offer, which if completed will be one of the biggest acquisitions since the financial crisis, is inclusive of debt.

NCR’s weak position could leave the board with little choice but to buckle under shareholder demands

With the auction still open for several weeks, other firms are also vying to purchase the company that made the world’s first mechanical cash registers. Still in the run are Apollo Global Management LLC and Thoma Bravo LLC, while the possibility of NCR backing out of any such deal could also transpire.

NCR’s move comes as a result of increasing shareholder pressure, with Marcato Capital Management in particular being cited as calling on the company to consider its options going forward. NCR recently announced that revenue had fallen by 25 percent in the first quarter of this year as a result of currency pressures and weakening sales. Slow growth has afflicted the firm as more individuals use mobile banking to carry out transactions as opposed to traditional methods.

In a bid to cater to new spending behaviour, NCR is entering the emergent market for smart ATMs and turning its attention to cloud-based software. In April, the firm launched its Kalpana software, a programme based on the Android operating system that streamlines functions at ATMs. NCR promises that Kalpana could reduce costs by 40 percent, while also helping to reduce fraudulent behaviour. NCR’s futuristic cash points allow users to withdraw money via their mobiles or using fingerprint identification, thereby removing the need of a bank card.

As new technologies and ventures have yet to take effect, NCR’s weak position could leave the board with little choice but to buckle under shareholder demands and accept the generous bid by Blackstone and Carlyle.