Private equity giant Blackstone is buying a 17 percent stake in NCR, giving the Duluth-based technology company an $820 million cash injection and putting to rest, for now at least, speculation it might be sold entirely.
NCR said the deal will accelerate its effort to morph from a hardware-maker into more of a software and services company.
NCR also said the partial Blackstone ownership will not change its plan to build a new headquarters in Midtown Atlanta. Groundbreaking on the new complex was last week.
“We are there to stay,” Kathy Damiani, an NCR vice president, said. “It is a shining star. It is a significant commitment.”
The company intends to bulk up to 3,600 employees, she said, although she declined to say how many employees the company now has in the area.
NCR, founded in Dayton, Ohio, in 1884, made its name as a maker of cash registers and more recently, computers. The company, which moved to Duluth in 2009, now makes automatic teller machines, kiosks and “point-of-sale devices,” but its business has struggled as customers shift to other forms of payment, especially with phones.
The company, which has about 29,000 employees worldwide, has lost about half its share value since peaking in 2007.
Shares, which are down about 9 percent for the year to date, shed 35 cents Thursday to $26.43.
Bill Nuti, NCR’s chairman and chief executive, said the Blackstone money is essential to remaking the company.
“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 Nuti’s statement.
Those “strategic alternatives” are believed by analysts to include a failed attempt to sell the company, although the company Thursday declined to comment.
In June, Reuters and others reported that Blackstone and the Carlyle Group had prepared a $10 billion joint bid for NCR, with other buyout firms also interested. But none of those takeovers materialized.
“I think that NCR did try to have a bigger transaction and they settled on this one,” said Kartik Mehta, analyst for Northcoast Research, a Cleveland-based equity research firm. “This is an interesting move. Whether it is good or bad, we don’t know for a while. But this transaction will get them expertise from another company.”
The company’s shift to services and software might mean job cuts and other “efficiencies,” Mehta said. “But if there are job cuts, I don’t think it will be because of this investment.”
NCR said it is “on track” to achieve about $70 million in savings this year, but declined to address the question of job cuts.
The Blackstone investment will also give the equity firm two seats on the NCR board of directors.
Blackstone is a global player with investments in a range of markets. For example, in the aftermath of the housing crisis, an arm of the company bought thousands of homes in metro Atlanta – some of which were sold to another company a few months ago.
