Atlanta-based NCR says it is on pace to split itself into two separate public companies before the end of this year.
But the automated teller and financial technology company, long-rumored as a potential acquisition target, is also reportedly considering selling a portion of its business.
NCR announced last year it would divide into one company focused on ATMs and another focused on digital commerce. Company leaders say that everything is on track for a smooth split by the end of 2023, announcing the forthcoming leadership for each company.
“Following the planned fourth quarter separation, we will become two strong, standalone companies with long runways for growth,” NCR CEO Michael Hayford said during an early May call with shareholders. The company has not released information on Hayford’s post-split role.
The decision to divide NCR, which company leaders said will spur further value for shareholders, raised questions about how Atlanta would be impacted, losing one Fortune 500 company in favor of two smaller corporations. It’s also unclear whether NCR’s two independent halves will continue to occupy the company’s posh Midtown campus at Georgia Tech’s Technology Square, which is under a long-term lease.
Further muddying the waters, NCR is considering selling the digital banking portion of its business for potentially more than $2 billion, Reuters reported Tuesday citing anonymous sources. A NCR spokesperson declined to comment to The Atlanta Journal-Constitution about a potential sale.
“We believe each company will benefit from increased operating and financial flexibility and will unlock significant value for our customers and stockholders,” Hayford said on the shareholders’ call.
Founded in Dayton, Ohio, in 1884 as National Cash Register Co., NCR moved to Georgia in 2009 amid the Great Recession. The company picked a pair of mid-rise office buildings near Gwinnett Place Mall, but announced a move to Midtown and a 15-year lease in 2015 with Cousins Properties.
The announced split of the company followed a 2021 strategic analysis of NCR, which has 38,000 employees worldwide. A sale of the whole company has been floated as a possibility by company executives, but they decided to break the company up last September when a buyer didn’t emerge.
The financial markets reeled at the announcement, with NCR’s stock plummeting 35% in the two weeks following the announced split. A cybersecurity incident on April 13 didn’t help matters.
Hayford said earlier this month that the company remained in the process of recovering “the majority of the most critical functions impacting our customers,” adding that the company is building a new cloud environment to bolster security. He said no ATM, digital banking or other retail products were impacted by the incident.
“While this was contained to a relatively limited set of our overall customer base, we absolutely understand how difficult this incident has been for those impacted customers,” Hayford said. “We take their business extremely seriously, and we sincerely apologize for any disruption this has caused.”
Stock prices, which bottomed out at below $19 per share last October, have recovered to about $24 as of Thursday morning.
NCR reported $1.9 billion in revenue during this year’s first quarter, a 1% increase from the same time period last year. The company forecasts up to $8 billion in revenue for 2023. NCR also reported $9 million in net income from January to March this year, compared to a $34 million net loss during the same time in 2022.
On May 4, NCR announced the two executives who lead the new independent companies once the split takes place. Tim Oliver, NCR’s current senior executive vice president and chief financial officer, was tapped as the CEO-designate for SpinCo — the placeholder name for the ATM spinoff. David Wilkinson, NCR’s current executive vice president and president of NCR Commerce will lead RemainCo — the temporary name for the company’s digital commerce functions.
Joseph Reece, who was elected to chair the NCR board of directors, said in a news release that Oliver and Wilkinson “are the right leaders to take these two industry-leading, technology-driven companies forward.”
Hayford added that NCR will soon submit federal forms to finalize the split’s timing, adding that the specific date will largely depend on the fed’s process and the current state of the financial markets.
— Staff writer Michael E. Kanell contributed to this story.
