ATM manufacturer NCR enjoyed a significant rise in its share price last week after Reuters reported that a private equity firm was planning a $9 billion bid for the company.
US-based Thoma Bravo is reported to be seeking to borrow almost seven times the annual earnings of NCR to acquire the ATM maker in what would be the largest leveraged buy-out deal so far in 2015. The private equity firm will have to raise at least $2 billion in equity and is seeking to assemble a consortium of investors to raise the remaining finances.
NCR has been attracting interest from private equity investors ever since it posted underwhelming quarterly earnings last month and faced shareholder pressure to seek a buyer.
In June Blackstone and Carlyle, the world's two biggest private equity firms, clubbed together to make a $10 billion bid for NCR. However, Reuters reports that they are skeptical of raising enough for a successful bid.
Along with Diebold, NCR is one of the world's major manufacturers of ATMs and PoS terminals. However retailers are increasingly moving away from these traditional tools and this has led to a slide in NCR's share price in recent months. The firm has tried to branch out into the software market and launched a cloud-based software system for ATMs in April.
However, fresh news of a possible buyout lifted the firm's share price by as much as seven per cent at one point last Friday.
Over the last 12 months, NCR's hare price has fallen by as much as 11% and its first quarter revenue of $1.48 billion was three per cent down on the 2014 figure for the same period, according to Reuters.