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NCR Keeps Acquisition Trend Alive With Partial Buyout of OKI

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NCR Corporation recently announced that it will acquire OKI Brasil’s IT services arm along with a few other software assets for an undisclosed amount. With this acquisition, NCR aims to expand its business in Brazil including the extended support options for banks, retailers and restaurants.

The agreement does not include OKI’s manufacturing operations and printing business in Brazil.

The buyout of OKI’s key assets is expected to boost NCR’s business across all its three segments — Banking, Retail and Hospitality.

Acquisitions: A Key Catalyst

NCR has supplemented its business growth through a strong inorganic growth story. In the past two decades, NCR has acquired more than 20 companies, which in turn, enabled it in enhancing its capabilities across different areas.

Even though the company has a highly leveraged balance sheet, we note that its strategic acquisitions have always been beneficial to its business.

The acquisition of part of OKI’s assets is the third buyout made by NCR this year. In February, the company bought Colorado’s leading provider of Hospitality POS Technology, BEC, in a bid to revive its sluggish hospitality business. Again in a similar effort to cement its hospitality business, NCR acquired the restaurant technology company, Texas P.O.S. Inc., this May.

Among the most notable acquisitions of 2018 are the transactions of StopLift, which helped NCR accelerate growth in self-checkout and store transformation solutions, and JetPay Corporation, which is assisting NCR to offset recent headwinds in its Retail segment by raking in significant revenues.

Further, the buyout of CimpleBox in 2016 has enriched its abilities to provide simplified SaaS-based back-office software to restaurant operators and retailers.

Moreover, the acquisition of Digital Insight in 2013, fortified NCR’s online and mobile banking solutions offerings while the takeover of Alaric Systems solidified its online transaction security software and fraud prevention solutions portfolio.

With the integration of Radiant Systems in 2011, NCR became a key provider of retail and hospitality Point-of-Sale (POS) terminals. The following year, NCR’s consolidations of POS Integrated Solutions Do BrasilComercio E Servicos De Informatica, RDS South America Comercio E Servicos De Informatica, Wyse Sistemas de Informatica, Transoft and uGenius Technology strengthened its product and service offerings across financial services, hospitality and retail verticals.

We believe, strategic acquisitions will help NCR widen its portfolio and foray into new markets.

Zacks Rank & Stocks to Consider

NCR currently has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader Computer and Technology sector are Silicon Motion Technology Corporation (SIMO - Free Report) , eGain Corporation (EGAN - Free Report) and Cirrus Logic, Inc. (CRUS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Silicon Motion, eGain and Cirrus is forecast at 5%, 30% and 15%, respectively.

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