NCR – Momentum Builds for Separation

NCR Corporation is the market leader in self-service banking and payment solutions, with a turnover of $7.83 billion in 2022, more than double that of its nearest rival, Diebold Nixdorf.

Last September, it announced that the Board had unanimously approved a plan to separate into two independent, publicly traded companies – one focused on digital commerce, the other on ATMs – in order to unlock value for shareholders.

On 26 June, it took a further step towards this goal by filing a Form 10 registration statement with the US Securities and Exchange Commission. This provides key information on the company’s business, strategy, summary of solutions and historical financial results, and is an important milestone in the separation plan, which is on target for completion by the end of 2023.

The company stated that it had, in the previous four years, made significant strides in creating a leading Software-as-a-Service (Saas) business while continuing to strengthen and grow the ATM business.

‘By creating two best-in-class independent companies, we should be able to accelerate the pace of transformation by enabling each to execute its own growth strategies and better capture the value-creation opportunities ahead,’ said Frank R Martire, Executive Chairman.

At the same time, it announced it had rejected the possibility of selling NCR as a whole company transaction, based on its assessment that it could not achieve an acceptable value for NCR for shareholders.

The plan involves the digital commerce company as a growth business, leveraging NCR’s SaaS-led model to continue transforming, connecting and running global retail, hospitality and digital banking. As an independent company, it will drive innovation and boost operational efficiency, and reinvest in the business to accelerate growth and recurring revenue.

The ATM company will be a cash-generative business focused on delivering ATMs-as-a-Service (AssS?) to a large, installed customer base across banks and retailers. It will build on NCR’s leadership in self-service banking and ATM networks to meet global demand for ATM access, and leverage new ATM transaction types, including digital currency solutions, to drive market growth.

The company says it will continue its move to a highly recurring revenue model to drive stable cash flow and capital returns to shareholders.

The separation will, according to NCR, create two strong companies, each with distinctive business goals and capital structures, and an increased flexibility to innovate. Because they will have different growth profiles and economic models, investors will have greater transparency and a better ability to value each of the businesses.

The Board of Directors has also announced that NCR’s current Senior Executive Vice President and Chief Financial Officer, Tim Oliver, and David Wilkinson – Executive Vice President and President of the NCR Commerce business – have been named as CEO-designates for SpinCo and RemainCo (company names yet to be determined) respectively. Additional leadership team appointments are expected to follow in the weeks and months to come.

The company has stated that it has begun the work necessary to re-launch and name each company as a separate and unique business this fall.