NCR at a glance
Headquarters: Duluth
Employees: About 30,000 worldwide and 4,500 in Georgia. Georgia operations include corporate offices in metro Atlanta, ATM manufacturing in Columbus and a facility in Peachtree City.
Fortune 500 rank: 412
2014 revenue: $6.59 billion, up 7 percent
2014 profit: $191 million, down 57 percent
Sources: NCR and Forbes Magazine
NCR’s planned Midtown headquarters and its vision to shape Atlanta’s technology scene could be undone if major investment groups are successful in their reported bids to buy the Fortune 500 company.
Reuters and others this week reported that Blackstone Group and Carlyle Group are preparing a $10 billion joint bid for NCR, now based in Gwinnett County. Other buyout firms are reportedly circling. Reports of possible asset sales and other measures to boost the company’s stock price have been rampant.
NCR did not make an executive available for an interview.
In an interview earlier this month, NCR CEO Bill Nuti said the company “goes through a review of strategic alternatives” annually, but he added his commitment to NCR, and to Atlanta, is long-term.
“To comment on rumors or speculation is not worth my time or effort,” Nuti said in a June 8 meeting with the editorial board of The Atlanta Journal-Constitution. “I love NCR, I love my company deeply. I’m not going to do things that are going to damage it for the stock price.”
NCR executives have spent years reinventing the business as they extended from the company’s legacy of cash registers and ATMs.
Automated tellers, payments systems and travel kiosks remain NCR’s best-known products. But the company is trying to evolve into a maker of software that can handle payments for e-merchants and brick-and-mortar stores, as well as provide deep analytics and customer service functions.
The future, as executives see it, is The Internet of Things: predictive technology and software that keeps customers coming back.
A new Midtown headquarters, announced earlier this year, would make the company more appealing to Georgia Tech grads and dovetail with the transition, they say.
The outlook is murkier to those outside the company. Speculation about NCR’s future has dogged the company, in part because NCR’s stock price has failed to return to its 2007 peaks after years of strategic overhaul. Such a transition for a company known for making machines is never easy, and even companies like HP have also had difficulty.
Marcato Capital Management, an activist shareholder group that has a board seat, has pushed NCR to create more value and improve the stock price, possibly through the sale of some assets.
Leveraged buyout groups — which buy firms using debt and take them private — often look to slash costs, sell assets and take on new business models or products to improve performance and make money.
A private equity sale would mean plans for big discretionary spending would go out the window, said Gil Luria, an analyst with Wedbush Securities. That could scuttle plans for NCR’s $260 million Midtown headquarters, costing both local jobs and Nuti’s ambitious plans to remark Atlanta as the “Silicon Valley of the East.”
“It’s very unlikely NCR would proceed with that move if it were owned by private equity,” Luria said.
“They would be in buckle-down, cut costs mode,” he said. “NCR wouldn’t be able to continue on that front.”
Atlanta Mayor Kasim Reed has touted the trophy Midtown headquarters as a signature economic development coup. Nuti has said he intends to help lure other technology companies to Atlanta, to create a hub. Those new jobs would help metro Atlanta keep a bigger share of Georgia Tech’s engineering grads, about half of whom leave the state each year.
The city and its economic development agency, Invest Atlanta, crafted an incentive package of nearly $16 million, including a grant and tax breaks for the headquarters move.
NCR has yet to receive any money or tax breaks, and the incentives are based upon performance — meaning bringing the promised 3,600 jobs to Midtown and the investment of more than a quarter-billion dollars in the headquarters campus, Invest Atlanta said in a statement.
The agency declined to comment on the buyout reports.
A $3.2 million grant that is part of the package would be disbursed as jobs are created or shifted to Atlanta, and tax savings only apply if the project is built. The city can seek repayment of grant funds if NCR doesn’t follow through.
NCR’s incentive package is structured in a way that it anticipates a second phase of development, signaling a commitment from NCR leaders to a first phase and an expansion.
Luria said despite Nuti’s protestations, it is well-known that bidders are kicking the company’s tires.
A research note by Goldman Sachs last week said the firm is taking no position on whether a sale will occur — but if one does, private equity makes the most sense. There are opportunities to restructure NCR’s retail business, the note said, which could make more money available.
“…We believe potential strategic buyers may be limited due to the various product/services segments the company competes in and the significant firepower needed to acquire NCR,” the note said.
Luria said NCR’s businesses are “doing OK,” and the only path to more value for shareholders could be a sale. The stock price has risen recently on rumors of a sale, but is still below its most recent 2013 peak.
Nuti said in the June 8 interview that the company is continuing to change. Reinvention, he said, is “one of the things I’m most proud of as CEO.”
Founded in 1884 as National Cash Register in Dayton, Ohio, NCR moved to Gwinnett County in 2009, lured by about $109 million in state and local incentives. It has continued to reinvent itself since the move.
“In 2005, the company was, in essence, going out of business. It would have been out of business or in serious straits,” Nuti told the AJC this month. “It’s hard for folks to really understand the level of transformation and reinvention that’s gone one in the last five years. A lot has transpired over that time.”
Nuti, who is based in New York City, spearheaded the strategic and headquarters moves. He said the company needs more brilliant software designers and has sought to tap into the creative minds coming out of research universities like Georgia Tech.
The goal of selling software, services and relationships is for NCR to tighten the bond it already has with merchants who buy its hardware.
“Our mission, quite simply put, is to be relevant today,” he said.
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