Blackstone to Sell 49 Percent of NCR Stake

3/13/17

DULUTH, Ga.–(BUSINESS WIRE)–NCR Corporation (NYSE: NCR) today announced that it has entered into an agreement with Blackstone (NYSE: BX), under which Blackstone is granted an early release from its lockup to sell a portion of its holdings to allow it to recoup its investment, while at the same time extending the lockup period on the remainder of that investment. The transaction, which will increase NCR’s planned 2017 share repurchases, is expected to deliver value to NCR stockholders and further optimize the Company’s capital structure.

“Given that Blackstone’s lock-up period for its perpetual convertible preferred shares is set to expire in early June, and as our common stock is approaching the mandatory 2018 conversion price of $54 for those preferred shares, we recently engaged with Blackstone on options for their investment,” said NCR Chairman and CEO Bill Nuti. “In a win-win solution, we have agreed to provide Blackstone with an early release to sell 49% of its holdings, or approximately 14.4 million shares on an as converted basis.” As part of the transaction, Blackstone will convert 90,000 of their convertible preferred shares into approximately 3 million shares of common stock, and NCR will repurchase those shares as part of its ongoing buyback programs. Nuti added, “This transaction is more accretive to our stockholders than further open market purchases, eliminates the ongoing dividend costs on the preferred shares, is accretive to EPS, and reduces our financial leverage.”

“We are pleased to continue to partner with NCR and are absolutely committed to the ongoing success of the company. After this transaction, we will continue to own close to our original investment amount in the company, at over $720 million,” said Greg Blank, Managing Director, Private Equity, at Blackstone. “Given the strong partnership between Blackstone and NCR, Blackstone is extending the lockup on our remaining 51% stake by another six months to December 1, 2017, and we will continue to have two seats on the NCR Board of Directors.”

Updating Guidance; EPS Effect

The Company is increasing full year non-GAAP EPS guidance by $0.02 due to the accretive nature of the transaction to $3.27 to $3.37, up from previous guidance of $3.25 to $3.35. The full year GAAP EPS is expected to be lower by approximately $0.10 and the first quarter GAAP EPS is expected to be lower by approximately $0.50 due to the one-time non-cash accounting impact of the redemption of the preferred shares. The Company does not expect this change to impact its first quarter non-GAAP EPS guidance, which is reaffirmed. Excluded from the full year and first quarter GAAP EPS guidance is the potential one-time accounting impact associated with the modification to the lock-up period. Therefore, the Company believes that a reconciliation of non-GAAP EPS to its most directly comparable GAAP financial measure, GAAP EPS, is not meaningful or available without unreasonable effort. All other previous guidance is reaffirmed.

Share Repurchase Programs

NCR has repurchased approximately 4.4 million shares of its common stock for approximately $204 million thus far in 2017 under its previously disclosed authorized share repurchase programs. As part of this transaction, NCR plans to increase its planned 2017 share repurchases to approximately $350 million from the previous $300 million.

Additionally, on March 12, 2017, the Company’s board of directors authorized a new $300 million share repurchase program to succeed its 2016 program, under which no availability will remain following the repurchase of shares from Blackstone. The timing and amount of any repurchases under the new program will depend upon market conditions. Repurchases under the new program may be made from time to time in the open market, private transactions, accelerated stock repurchase programs, issuer self-tenders or otherwise, and may be discontinued at any time.

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