Blackstone Group LP (NYSE: BX) agreed to invest $820 million in NCR Corp. (NYSE: NCR), taking a minority position in the automated teller machine-maker that it tried to buy earlier this year.
Blackstone will receive convertible preferred stock that, after a share buyback by NCR, will represent a stake of about 17 percent in the Duluth, Georgia-based company, according to a statement Thursday from the companies. Blackstone’s Chinh Chu and Greg Blank will join NCR’s board.
NCR, which makes checkout equipment as well as ATMs, is more than one-third owned by hedge funds, including Jana Partners and activist Marcato Capital Management, whose Mick McGuire joined NCR’s board last year. The company started reviewing strategic options this year, and people familiar with the process said Blackstone and Carlyle Group LP were among private equity firms that explored acquiring it in a leveraged buyout, ultimately disagreeing on price with NCR and its bankers.
Blackstone is the world’s biggest alternative-asset manager, overseeing $334 billion in private equity holdings, real estate, credit assets and hedge funds.
NCR said it will use Blackstone’s investment to help buy back as much as $1 billion of common stock at an expected range of $26 to $29.50 a share. Blackstone’s preferred shares, which pay a 5.5 percent dividend, are convertible to common stock at $30 a share, an 18 percent premium to the volume-weighted average in the 30 days through Wednesday.
"Blackstone is an experienced technology investor with a long-term perspective that can help us continue to drive our higher-margin software-related revenue, deliver world-class service globally, optimize our manufacturing processes and supply chain, and rationalize costs," Bill Nuti, NCR’s chief executive officer, said in the statement.