) recently announced the acquisition of retail software and
services company Retalix Ltd. for $30.00 per share in cash,
totaling approximately $650 million.
NCR is treading the acquisition route for growth and the
recent acquisition is consistent with this strategy. Through this
acquisition, NCR seeks to migrate to a hardware-enabled,
software-driven business model, thereby delivering solutions that
would improve business operations, resulting in enhanced customer
satisfaction. NCR primarily intends to shift its business mix in
the higher-margin software and services. Moreover, the company
wants to provide better value added services to its
NCR will also deploy Retalix's software to strengthen and
enhance its enterprise software platform, thereby creating a new
software base to be used across the retail industry, and
ultimately influencing NCR's financial, travel and hospitality
industries all over the world.
The company is also focusing on its core ATM business, which
is seeing an improvement in business volume, as regional banks
are upgrading their ATMs. Moreover, the recently acquired Radiant
System is also making a meaningful contribution in this
particular segment. This apart, the company is also tightening
its grip on the ATM and Point-of-Sale (POS) markets in Europe,
particularly in Germany.
Although the company continues to witness a turnaround story
in Europe, the situation looks particularly bleak in Western
The company is constantly evolving its business strategy to
increase profitability. Moreover, given the integration of
Radiant System and favorable position in Germany, the company's
revenue is expected to increase going forward. Although the
restructuring initiatives have begun impacting results and demand
is picking up, we believe that it will take some more time to
have a meaningful impact on results.
Moreover, high interest outflow of the company may have a
negative impact on the profitability of the company and needs
special attention. Moreover, the company is coming up with new
strategies to compete against
The company has a Zacks #3 Rank, implying a short-term Hold
rating. The long-term recommendation remains Neutral.
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