Tags:
Hardware,
Manufacturers,
Software
8/01/11
NCR Corp. and Radiant Systems Inc. today announced a definitive agreement for NCR to acquire Radiant Systems, a provider of multichannel point-of-sale and managed hosted service solutions to the hospitality and specialty retail markets, through a cash tender offer of $28 per Radiant Systems share.
According to the announcement posted by NCR, the equity purchase price of $1.2 billion has been approved by the boards of directors of both companies. The transaction is anticipated to close during the third quarter of this year, subject to regulatory approval, according to the companies.
The transaction accelerates NCR's strategy of expanding into core industry adjacencies, increasing revenue growth rates and expanding margins by enhancing its mix of software and services. Radiant Systems' software and software-as-a-service capabilities will significantly enhance NCR's solutions, creating a superior portfolio of multichannel point-of–service and self-service solutions. NCR will use its global sales, services and operations organizations to extend this portfolio to many of the fastest-growing markets in the world, while driving supply chain, operational and innovation synergies. Market coverage will be enhanced by Radiant Systems' strong channel partner network, which will complement NCR's channel and support its goal of building a world-class channel partner network.
With the addition of Radiant Systems, NCR will create a third core industry vertical, after its financial and retail lines of business, and establish itself further in the hospitality and specialty retail markets. The hospitality and specialty retail total addressable markets are approximately $8 billion in size and under-penetrated by industry leaders, according to today's announcement. NCR plans to leverage Radiant Systems' leadership position in quick service and table service restaurants, specialty and convenience retailers and entertainment venues by combining Radiant Systems' solution and services portfolio with NCR's existing portfolio, brand and global reach. The transaction is expected to be accretive to NCR's Non-GAAP earnings in 2012.
"Radiant Systems is a logical and strategic extension for NCR, moving us into attractive fast-growth adjacent markets," NCR Chairman and CEO Bill Nuti said in the announcement. "Radiant Systems has delivered 15 percent compounded annual revenue growth over the last five years, along with impressive margin expansion as a result of the high customer demand for its expansive software offerings. This acquisition will enable our companies to accelerate expansion through the powerful combination of each other's strengths and NCR's track record of driving transformational change. We will bring together two strong teams with Radiant Systems playing a vital role in enhancing our long-term growth, margin expansion and earnings appreciation."
Key members of the Radiant Systems management team will play integral roles in strengthening NCR's position in hospitality and specialty retail, including Andrew Heyman, currently Radiant Systems' COO, who will lead the new vertical. The two companies anticipate a seamless transition for customers, channel partners and employees.
The tender offer is expected to commence on or before July 25, 2011. The offer will be open for a period of not less than 20 business days from its commencement and will be conditional upon, among other things, valid acceptances of the offer in respect of shares representing more than 50 percent of the outstanding Radiant Systems shares on a fully diluted basis as well as satisfactory completion of other customary closing conditions, including regulatory approval.
The acquisition will be financed through a combination of new debt and existing balance sheet cash. NCR will raise approximately $1.1 billion of new funded debt to finance the transaction. The financing will enable NCR to maintain a strong liquidity position post transaction. J.P. Morgan, RBC Capital Markets, BofA Merrill Lynch and Morgan Stanley provided committed financing to NCR for the transaction.
Atlas Strategic Advisors LLC and J.P. Morgan Securities LLC acted as financial advisors to NCR on the transaction and Womble Carlyle Sandridge & Rice PLLC acted as legal counsel.
In connection with the transaction, Jefferies & Company Inc. is acting as lead financial advisor; SunTrust Robinson Humphrey Inc. is acting as co-advisor to Radiant Systems; and DLA Piper LLP (U.S.) is acting as legal counsel
