Back to top

Analyst Blog

In a bid to strengthen its financial services business, NCR Corp. (NCR - Analyst Report) announced its definitive agreement to acquire Digital Insight Corp. for a purchase consideration of $1.65 billion. NCR also closed the acquisition of Alaric Systems Ltd, a provider of fraud prevention solutions, for a purchase price of $84.0 million. Both the acquisitions will be accretive to its 2014 earnings.

Digital Insight Corp., a provider of online and banking solutions, complements NCR’s existing business, while increasing its capabilities. The acquisition will enable NCR to provide a unique customer experience across mobile, bill pay and online banking channels in addition to the ATM service it already provides.

It also significantly expands the existing client base.  Further, the acquisition will help NCR customers to access account balances, payments via mobile banking apps for Apple (AAPL - Analyst Report) iOS and Android devices.

The merger of Alaric Systems Ltd will help to reduce complexities in managing ATM, point of sale, e-commerce and mobile payment or banking transactions. It will simplify transactions by providing privacy and protection of information, thereby reducing the risk of maintaining large data volumes.
 
The company remains the largest supplier of ATM machines in North America while maintaining its leadership in Asian and European markets. According to the latest research by RBR Research, the global installed base of ATMs is expected to increase 44%  from2012 to 2018, fueled by increased demand in Russia and the emerging economies of the Asia-Pacific, the Middle East and Africa.

Apart from this, NCR has strengthened its position in the POS market through the acquisition of Radiant Systems. It also strengthened its hardware-enabled, software-driven business model through the acquisition of Retalix, which helped it to offer advanced solutions to enhance customer satisfaction.

NCR Corporation is a global technology company and a world leader in consumer transaction technologies. However, softness in its ATM business in the mature markets, competition from Diebold Corp. (DBD - Snapshot Report) and IBM Corp. (IBM - Analyst Report), European exposure and a high debt burden are concerns.

NCR Corp. has a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.