NCR to Spin off Teradata, Focus on Self-Service
Breitkopf, David, American Banker
NCR Corp. said its decision to spin off the Teradata warehousing division will let it focus on its core self-service technologies businesses, especially automated teller machines and checkout systems.
The Dayton, Ohio, company announced the spinoff plan Monday, acknowledging that the Teradata business, which sells database software, data mining, and consulting and support services, lacked synergies with its other operations.
Teradata and the other NCR businesses "operate in different markets with markedly different business models," Bill Nuti, NCR's president and chief executive, said in a conference call Monday. "There are not really any synergies on the revenue side."
NCR sells equipment for several industries, but Mr. Nuti said the new company would be "focused on self-service technologies, including ATMs; self-checkout systems for retailers; automated bill payment kiosks; and self-check-in systems for airlines, hotels, and hospitals."
Jim Ringler, the Ohio company's chairman, said during the call that the board has been contemplating a Teradata spinoff for years but retained the division because it was not "sound enough."
"Only a few years ago, it wasn't making money," Mr. Ringler said. "As it began to make more money and get a very solid base, we felt it would be the time to give it serious consideration. So that is what started in the past year."
Mr. Nuti, who took the helm at NCR about 18 months ago, will remain president and CEO. Mike Koehler, currently the senior vice president in charge of Teradata, is to be its president and CEO.
The spinoff is expected to occur in the next six to nine months through a tax-free distribution of all of NCR's Teradata stock to existing NCR shareholders.
Teradata's revenue equals about one-third of NCR's but generates more profit than the rest of the company. NCR released a financial breakdown Monday that showed self-service system operations bringing in $4. …