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Blackstone to invest $820m in NCR Corp.

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Staff writer ▼ | November 13, 2015
NCR Corp. has entered into an agreement with Blackstone under which affiliates of Blackstone will invest $820 million in NCR in the form of perpetual convertible preferred shares.
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The company expects its relationship with Blackstone to accelerate NCR’s ongoing strategic transformation into an integrated software and services company. NCR will use the Blackstone investment to help fund a repurchase through a self-tender of up to $1 billion of its common stock.

NCR intends to repurchase up to $1 billion of its common shares through a modified “Dutch Auction” tender offer at an expected price range between $26.00 and $29.50 per share expected to commence November 13, 2015.

The company will fund the tender offer with the proceeds of the Blackstone investment, cash on hand and borrowings from its revolving facilities.

Blackstone will purchase $820 million of convertible perpetual preferred stock, which is convertible into shares of NCR common stock at a conversion price of $30.00 per share. The conversion price represents an 18% premium to the 30-day volume-weighted average price ended November 11, 2015.

The preferred stock carries a 5.5% dividend, which will be payable in kind for the first four years following issuance. On an as-converted basis, the preferred stock will represent approximately 17% of NCR’s shares outstanding after giving effect to the Blackstone investment and share repurchase (assuming the tender offer is fully subscribed at the midpoint of the price range).

Blackstone may convert the preferred into common at any time and may require NCR to repurchase the preferred after 8-1/2 years and every 3 years thereafter. The preferred will be mandatorily convertible into common if the stock price exceeds certain thresholds.

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