Engaged Capital, an activist investor, expressed its belief at the Bloomberg Activism Forum 2024 that NCR Atleos Corp. and NCR Voyix Corp., both spun off from NCR Corp., could become attractive acquisition targets for financial or strategic buyers. This potential arises if the market continues to undervalue these businesses.
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Following the 2023 separation of NCR Corp. into two distinct entities, the market has “failed to recognize the substantial upside” present in both NCR Atleos and NCR Voyix, according to Blake Zacharias, Senior Analyst at Engaged Capital. Engaged Capital is currently a top-five shareholder in both companies, based on Bloomberg data.
Potential Acquisition Targets Due to Undervaluation
Zacharias highlighted the potential for NCR Voyix, a provider of point-of-sale and self-checkout solutions, to double its current share price. He noted that the company’s valuation, measured by its enterprise value to EBITDA (earnings before interest, taxes, depreciation, and amortization) multiple, is currently lower than the industry average. This undervaluation presents a compelling opportunity for potential acquirers.
NCR Atleos, specializing in ATM-as-a-service solutions for major banks and other clients, boasts a network of 285,000 owned or managed ATMs, as per information on its website. The company’s robust infrastructure and established customer base could make it a prime target for acquisition.
While NCR Atleos declined to comment on the speculation, NCR Voyix did not immediately respond to requests for comment.
Engaged Capital’s Activist History
Engaged Capital’s involvement with NCR began in 2022 when it acquired a stake in the company and secured a seat on the board. The firm has a history of activist investing, with previous positions in companies such as Portillo’s Inc., Nevro Corp., and VF Corp. This track record suggests a proactive approach to enhancing shareholder value, potentially through advocating for strategic transactions like a sale.
Conclusion: A Compelling Investment Thesis
The potential for acquisition of NCR Atleos and NCR Voyix, driven by market undervaluation and the inherent value of their respective businesses, presents a compelling investment thesis. Engaged Capital’s significant stake and activist history further underscore the potential for strategic action to unlock shareholder value in these companies. While market response remains to be seen, the possibility of a buyout adds another layer of intrigue to the future trajectory of these former NCR Corp. subsidiaries.
