Contact: Brenon Daly
In yet another signal that the credit market has reopened for business, NCR has announced that it will issue $1.1bn in debt to cover the cost of its largest-ever acquisition. The company, which has relied on M&A to expand beyond selling the cash registers that it invented in 1884, said late Monday that it will pay $1.2bn for Radiant Systems. The purchase will add Radiant Systems’ point-of-sale products focused on the hospitality and restaurant industries to NCR’s portfolio, as well as boost the acquirer’s growth rate and margins, according to post-closing projections.
NCR will hand over $28 for each share of Radiant Systems. That represents a roughly 28% premium on Radiant Systems’ previous closing price and twice the level of the stock a year ago. The offer values Radiant Systems at about 3.4 times trailing sales of $354m.
The debt-funded purchase of Radiant Systems marks the latest in a series of transactions that have shaped NCR’s long corporate history, which included an IPO back in 1926. More recently, NCR was acquired by AT&T in 1991, the same year that NCR added data-warehousing pioneer Teradata. AT&T then spun off NCR in 1997, and a decade later, free-standing NCR spun off Teradata. For those keeping score, Teradata now has a $10bn market capitalization, three times NCR’s current valuation.