NCR in talks to create $12 bln ATM company with Brink's -sources

The Brink's

11/10/2023 18:33

(Adds share reaction in paragraph 7,background on the companies
in paragraphs 8 through 12)
    By Svea Herbst-Bayliss
       NEW YORK, Oct 11 (Reuters) - NCR Corp  NCR.N  is in
advanced talks to merge its automatic teller (ATM) business with
cash management firm Brink's Co  BCO.N , creating a combined
company worth close to $12 billion, including debt, people
familiar with the matter said.
    The deal, structured as a Reverse Morris Trust, would allow
NCR to merge the ATM business at a $5.5 billion valuation with
Brink's and give a large chunk of the combined company to NCR
shareholders tax free, the sources said.
    That valuation equates to seven times the projected earnings
before interest, taxes, depreciation and amortization of NCR's
ATM business in 2024, the sources added.
    Brink's, which is valued at about $6.2 billion including
debt, moves cash around the world for its clients and provides
ATM services among other things. It approached financial
technology and software company NCR in recent months with the
deal proposal, and negotiations could conclude as early as next
week, the sources said.
    The sources cautioned that an agreement is not certain and
asked not to be identified because the matter is confidential.
    Representatives for NCR and Brinks were not immediately
available for comment.
    NCR shares rose 9% on the news, while Brink's shares dropped
10% in afternoon trading in New York on Wednesday, reflecting
the transfer of value in the potential transaction from Brink's
as an acquirer of the ATM business to NCR as a seller. 
        NCR said in September 2022 that it planned to separate
its digital commerce business from its ATM division in a
tax-free manner. The commerce business NCR will retain provides
payments software to the retail, hospitality and digital banking
industries.
  
        In total, NCR generated revenue of $7.8 billion in 2022,
up from $7.2 billion in 2021. 
  
        The company announced earlier on Wednesday that its CEO
Michael Hayford would retire upon the separation of the
businesses.
  
        The Brink's management team, led by CEO Mark Eubanks,
will lead the newly created company should the deal be agreed,
the sources said. 
  
        Based in Richmond, Virginia, Brink's makes most of its
revenue helping companies transport cash and operating ATMs. It
posted revenue of $4.5 billion in 2022, up from $4.2 billion in
2021.
  

 (Reporting by Svea Herbst-Bayliss; Editing by Mark Porter and
Diane Craft)
 ((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))