He added that February’s strategic review sparked interest in the sale of the whole company as well as interest in individual aspects of the business. However, Martire said selling the entire company wasn’t achievable.
“In recent days, it has become increasingly clear to the board that, given the state of current financing markets, we cannot deliver a whole company transaction that reflects an appropriate and acceptable value for NCR to our shareholders,” he said.
S&P Global downgraded NCR’s credit rating in May over the inflationary cost pressures and persistent supply chain issues facing hardware-focused companies.
”... Improvements will take time and higher costs may be more difficult to pass through considering the already contracted hardware business in backlog and inflation challenges its customers face,” the report said.
An investor presentation published on its website said NCR’s board “remains open to all strategic alternatives until the completion of the transaction, including a sale of whole company of NCR or individual segments.”
The two future public companies, for now, will be known as CommerceCo, consisting of the digital commerce and retail and online banking businesses, and ATMCo, the automated teller and self-service banking unit.
The board of directors argued the split will allow each company to better deliver sustainable growth and provide more financial flexibility.
The combined NCR reported $7.2 billion in revenue in 2021, and $98 million in net income for the year. In 2020, NCR reported $6.2 billion in revenue, and a $78 million loss.
An investor presentation said CommerceCo would be a $4 billion in annual revenue company, with customers such as Wal-Mart, Chick-fil-A, McDonald’s and Synovus. ATMCo would be a $3.8 billion in annual revenue company, with clients including Bank of America and Wells Fargo.
NCR said it will continue to evaluate cost cutting potential, capital structures and management teams of the two future companies.
The announcement of the corporate split received a rocky reception on Wall Street. By closing Friday, the NCR’s stock had dropped more than 20% to $23.20.
NCR, founded in Dayton, Ohio, in 1884 as National Cash Register Co., moved to Georgia in 2009 after the Great Recession. The company picked a pair of mid-rise office buildings near Gwinnett Place Mall.
Then in January 2015, NCR announced plans to build a new headquarters campus in Midtown at Technology Square, a project that ultimately grew to include two towers and more than 5,000 workers. The gleaming Midtown campus was a $450 million bet that a corporate beachhead in Midtown could help the company recruit top talent from Georgia Tech and other research universities.
That bet was followed by a number of Fortune 500 companies, such as Norfolk Southern and Google, that planted corporate flags on Georgia Tech’s doorstep.
But in recent years, NCR has been subject to acquisition rumors as it tried to transition itself from traditional hardware, such as cash registers and automated tellers, to software and the internet-of-things, or IoT, which is when machines communicate with one another.
NCR has worked to transform itself into an “omni-channel leader,” helping merchants reach customers seamlessly in store, online and through mobile devices.