U.S. markets close in 6 hours 17 minutes
  • S&P 500

    4,125.57
    -26.53 (-0.64%)
     
  • Dow 30

    34,120.48
    -148.68 (-0.43%)
     
  • Nasdaq

    13,247.85
    -141.57 (-1.06%)
     
  • Russell 2000

    2,206.99
    -5.71 (-0.26%)
     
  • Crude Oil

    66.00
    +0.72 (+1.10%)
     
  • Gold

    1,833.20
    -2.90 (-0.16%)
     
  • Silver

    27.55
    -0.12 (-0.42%)
     
  • EUR/USD

    1.2111
    -0.0041 (-0.34%)
     
  • 10-Yr Bond

    1.6740
    +0.0500 (+3.08%)
     
  • GBP/USD

    1.4125
    -0.0019 (-0.13%)
     
  • USD/JPY

    109.1400
    +0.5200 (+0.48%)
     
  • BTC-USD

    56,219.29
    +989.09 (+1.79%)
     
  • CMC Crypto 200

    1,522.87
    -40.96 (-2.62%)
     
  • FTSE 100

    6,993.92
    +45.93 (+0.66%)
     
  • Nikkei 225

    28,147.51
    -461.08 (-1.61%)
     

NCR Upsizes Senior Notes to Fund Cardtronics Acquisition

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

NCR Corporation NCR recently announced that it has upsized its recent pricing of senior unsecured notes offering from $1.1 billion to $1.2 billion on high market demand. The notes carry an annualized interest rate of 5.125% and will mature in 2029. The company stated that the additional $100 million worth of notes will be sold at 100.25% of the principal amount, while the remaining $1.1 billion would be sold at 100% of the principal amount. The offering is anticipated to close on Apr 6.

The net proceeds, along with borrowings under its senior secured credit facilities and available cash balance, will be used to fund the impending acquisition of Cardtronics Plc CATM. Notably, in late January, NCR entered into a definitive agreement to acquire Cardtronics for $2.5 billion. The acquisition is anticipated to complete in mid-year 2021. However, if the acquisition does not take place, net proceeds from the issuance of the notes will be used in general corporate purposes after paying the mandatory redemption price.

NCR Corporation Price and Consensus

NCR Corporation Price and Consensus
NCR Corporation Price and Consensus

NCR Corporation price-consensus-chart | NCR Corporation Quote

Rationale Behind the Cardtronics Acquisition

Cardtronics processes value-added payment transactions and provides ATM solutions to financial service providers in a bid to aid in-store traffic and retail transactions. It also enables cash transactions at more than 285,000 ATMs across 10 countries. It also provides a retail-based surcharge-free ATM network through its Allpoint Network across more than 55,000 locations.

Notably, the proposed acquisition is anticipated to fortify the NCR-as-a-service strategy. Cardtronics’ robust debit network will further expand NCR’s payments platform and help it connect to retail and bank customers, thereby facilitating customer acquisition.

Moreover, the integration will give the company access to Cardtronics’ installed base of ATM network across multiple regions. This will support the company to enhance its scale of business and boost cash flows. It will also help the company capitalize on the ongoing transition of the banking industry toward outsourcing of ATM operations and branch rationalization.

Apart from these, the buyout bodes well for NCR’s steady focus to enhance its software and services revenue mix, and drive margin expansion by boosting the company’s recurring revenues.

NCR believes the acquisition of Cardtronics would be accretive to its adjusted EPS in the first full year following the transaction’s conclusion. Additionally, it expects to achieve $100-$120 million in operating cost synergies by the end of 2022.

Zacks Rank & Stocks to Consider

NCR currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are Skyworks Solutions SWKS and Etsy, Inc. ETSY, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Skyworks Solutions and Etsy is currently pegged at 18.98% and 25.25%, respectively.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NCR Corporation (NCR) : Free Stock Analysis Report

Cardtronics PLC (CATM) : Free Stock Analysis Report

Etsy, Inc. (ETSY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research