Bank technology provider NCR is to split into two companies, separating its digital commerce and ATM businesses.
According to a statement from the company, by the end of next year NCR plans to have completed the separation, which is subject to approval by the Securities and Exchange Commission (SEC).
Following the separation, NCR’s ATM business — initially dubbed ‘ATMCo’ — will offer a “ATM as a service” to banks and retailers. This company will look to maintain and grow self-service banking — currently 70% of its revenues — and ATM networks globally as well as explore growth into new markets such as digital currencies.
Meanwhile, the digital commerce business — CommerceCo — will focus on growth opportunities in digital banking, as well as retail and hospitality. Approximately 14% of its revenue currently comes from digital banking, according to a presentation to investors, with the business offering services similar to those from banking tech firms FIS and Fiserv.
NCR chief executive officer Michael Hayford said the business split would allow each arm to focus on growing at scale and innovating in their separate areas. It would also allow the companies to simplify operations and “put us in the best position to drive the most competitive products and solutions for our customers”, Hayford added.
Frank Martire, executive chairman of NCR’s board, said the decision would allow NCR to “accelerate the pace of transformation by enabling each [company] to execute its own growth strategies and better capture the value-creation opportunities ahead”.
The decision was reached following a strategic review of the company, initiated by the board in February this year.
Georgia-based NCR had received “material interest” from third parties keen to purchase the company as a whole, but Martire said market conditions had not allowed for a whole company deal that “reflects an appropriate and acceptable value for NCR to our shareholders”.
However, in a presentation to investors the company made it clear that if attractive alternative options became available that would improve upon the separation decision, the board would consider them.
The company said it was “continuing to assess key aspects of CommerceCo and ATMCo, including potential cost-saving opportunities, management teams, boards, capital structures, and capital return policies”.