Bankers know NCR Corp. for its high-tech ATMs, video teller machines and other branch gizmos. But the Duluth, Ga.-based vendor also is a big supplier of point-of-sale software for retailers and other businesses.
NCR is trying to bulk up its product arsenal in this segment by acquiring competing software vendor Radiant Systems Inc. for $1.2 billion in cash (
The deal, which NCR announced July 11, could help the company grow to 25% to 30% market share for the U.S. restaurant point of sale hardware and software from an existing position of about 5% to 10%, analyst Gil Luria estimates.
“I think NCR is doing well, and it’s doing well in the ATM business,” Luria says. “This is going to help them do even better in the retail business.”
The acquisition, which is expected to close in the third quarter, would help NCR add a third business segment to focus on– hospitality–and give it opportunities to grow revenue by cross-selling each others’ products to their respective customer bases, Bill Nuti, NCR chairman and CEO, told analysts July 11. Nuti called Radiant an “unusually good fit for our company.”
“By adding Radiant’s business to NCR, we’re establishing our third core vertical and strengthening our focus and penetration in hospitality and specialty retail, becoming an immediate leader in that segment,” Nuti said. The acquisition would grow NCR’s market opportunity for the hospitality and retail segments by $8 billion, he added.
Radiant, of Alpharetta, Ga., sells software that runs cash registers, scheduling, inventory management and other functions to quick-service and “table-service” restaurants and to entertainment venues, such as movie theaters and stadiums.
“Radiant has been a very good competitor,” Luria says. “Radiant sells a lot of very functional software to restaurants as well as other retailers, and they’ve been able to grow very nicely within the market … over the last few years. That’s not only a worthwhile business for [NCR] to buy, they could expand Radiant’s distribution internationally.”
About 15% of Radiant’s business is international, an NCR spokesperson said in an email.
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