NCR ATM Spin-off Notes

September 8, 2023 Update:

Commentary from NCR’s July earnings call:

July 9, 2023 Update

NCR announced they are spinning off their ATM business in this recent filing

NCR VIC Write Up (must create a free account to read)
  • Good overview of upcoming spin-off.
  • Author makes the case the stock could be a double.

Another good write up on the NCR ATM Spin-off

October 1, 2022 Update

NCR Corp (NCR) announced on September 15th that it is expected to separate into two publicly traded companies. One will be focused on digital commerce and the other on ATMs. The current targeted completion date is for the end of 2023.

The digital commerce company works with their Banking, Retail, Hospitality, and Telecommunications and Technology segments to provide tailored solutions. This has been built out over the last four years to become a leading software-as-a-service business in the space. This segment will be a growth business.

The ATM company with its large installation base in the bank and retailer space, will continue to capitalize on strong recurring revenues, while shifting more of the business into new transaction types as well as digital currency solutions. This segment will be a more stable, cash generative business.

NCR said initially that they had received some interest in a whole or partial sale of the business, but with the current market volatility, management felt a spin-off was the best way to maximize value for shareholders. I need to do additional work, but at first blush, NCR looks fairly interesting. It’s trading at 6x forward EBITDA and 5x free cash flow. It is relatively highly leveraged (5x net debt to EBITDA) but has no meaningful maturities before 2025.