One of Atlanta’s largest companies has filed key paperwork with securities regulators to split itself into two public entities.
NCR, an automated teller and financial technology company, filed documents on Monday with the Securities and Exchange Commission, revealing new details on the impending split. Officials for the Fortune 500 company said last September they expected the separation to take place by the end of 2023, resulting in one company focused on ATMs and the other on digital banking and commerce.
NCR filed a Form 10 registration statement for the future stock of the ATM business that outlines financial performance and potential risks for investors. The filing focuses on the strategy and finances of the future ATM company, which is referred to as the placeholder name NCR ATMCo. The future digital commerce company will continue to be called NCR.
NCR, long-rumored as a potential acquisition target, has said splitting the businesses will spur further value for shareholders. Tim Oliver, NCR’s current senior executive vice president and chief financial officer, has been tapped as the CEO-designate for the ATM business.
“We are building an organization that will sustain NCR’s market leadership and extend the success of our ATM-centric businesses well into the future,” Oliver said in a news release.
Annual revenue from the ATM business has grown each of the past three years to $4.1 billion in 2022. Net income from the business, however, was $108 million last year, down from $186 million a year earlier as expenses have grown.
At the end of last year, NCR owned and operated roughly 85,000 ATMs across the globe and reported that majority of its ATM business — about 55% — was conducted overseas, the form said.
NCR ATMCo expects to take on $2.7 billion in new debt as part of the separation, of which it’ll remit $2.5 billion to NCR for the transferred assets.
Under its separation agreement with NCR, the ATM business will be responsible for all current and future costs related to the contamination of the Kalamazoo River in Michigan. NCR agreed in 2020 to a $245 million settlement with multiple federal agencies.
“There can be no assurances that the costs required to comply with applicable environmental laws will not impact future operating results,” the Form 10 said.
The combined NCR forecasts up to $8 billion in revenue for 2023. Last year’s revenue was $7.8 billion, and net income was $64 million.
The publicly traded company saw its stock bottom out at below $19 per share last October, a month after the company announced its intentions to split. Share prices have recovered to more than $24 as of Wednesday morning.
Founded in Dayton, Ohio, in 1884 as National Cash Register Co., NCR moved to Georgia in 2009 amid the Great Recession. In 2018, NCR opened a shiny 765,000-square-foot campus at Georgia Tech’s Technology Square, which remains under a long-term lease. NCR recently put one of the two office towers in the campus up for sublease.
The federal filing does not disclose the future headquarters of the ATM business. It is possible the ATM business could opt to assume part or all of that listed sublease space.
A spokesperson declined to comment about the companies’ future office plans.
The impending split will likely result in both new companies falling off the Fortune 500 list of the largest American companies by revenue, which would leave metro Atlanta with 16 entries on the list.
Separately, Reuters reported recently that NCR was mulling a potential sale of part of its business for $2 billion.
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