ATM maker NCR to buy Radiant for $1.2bn

ATM maker NCR Corp is to buy Radiant Systems Inc, which makes cash registers and other point-of-sale devices, for about USD 1.2 billion in cash to expand into the hospitality and specialty retail industries.

NCR offered USD 28 a share for Radiant -- 31% more than Radiant's last closing price, adding a third vertical to its business that currently includes finance and retail.

With this deal, NCR will give up its ambitious plans for its entertainment business and is exploring strategic options for that, CEO William Nuti said on a conference call with analysts.

NCR operates DVD kiosks that compete with Coinstar's Redbox and Netflix.

The acquisition, NCR's biggest ever, will help the company tap the USD 8 billion market for point of sales terminals used by the hospitality and specialty retail industries.

"It is a very good acquisition for NCR," said Gil Luria, an analyst with Wedbush Securities. "Radiant has been outgrowing the market for a few years. They can help NCR grow their retail business faster."

Luria said Micros Systems could be interested in making a rival offer for Radiant.

Alpharetta, Georgia-based Radian makes touch screen terminals, servers, handheld devices and software to manage operations such as day-to-day transactions, costs and employee management.

Radiant's customers include Exxon Mobil, Kroger and Nordstrom. Its 2010 revenue was USD 344.9 million.

NCR had planned to make entertainment its third vertical and had focused on expanding its current network of DVD kiosks that are deployed at supermarkets, convenience stores and drug stores.

"While that initiative has been successful, it does not offer nearly the same type of complimentary industry adjacency as Radiant's business," Nuti said on the call.

NCR said the deal would add to its adjusted earnings in 2012.

The company will raise about USD 1.1 billion of new debt to finance the deal.

Atlas Strategic Advisors LLC and JP Morgan Securities LLC acted as financial advisers to NCR. Jefferies & Co is acting as lead financial adviser, while SunTrust Robinson Humphrey is acting as co-advisor to Radiant.

NCR shares rose 2% to USD 19.50 in after market trade. Radiant shares rose 30% to USD 27.95.