NCR Corporation today announced a definitive agreement 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 $28.00 per Radiant Systems share. The equity purchase price of $1.2 billion has been approved by the boards of directors of each company. NCR and Radiant Systems currently anticipate the transaction will close during the third quarter of 2011, subject to regulatory approval.
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 (SaaS) capabilities will enhance NCR’s solutions, creating a 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 category leadership 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. 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.
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’ chief operating officer, 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.