NCR Voyix has agreed to sell its digital banking division to a New York-based investment firm for approximately $2.45 billion in cash.
The deal, set to be completed by the end of the year, will see Veritas Capital acquire NCR Voyix’s digital banking operations. This business is recognized as the biggest independent platform in the country, supporting over 1,300 financial institutions and 20 million users. The sale is an important development for both companies and will likely impact the wider fintech and digital banking industries.
Key Takeaways
- Sale of Digital Banking Division: NCR Voyix is selling its digital banking division to Veritas Capital for $2.45 billion in cash, with a potential additional payment of up to $100 million. The transaction is expected to close by the end of 2024.
- Strategic Focus: The sale is not just a transaction but a strategic move by NCR Voyix to streamline operations and focus on its core businesses, specifically the restaurant and retail sectors. This decision, made with foresight and planning, will allow the company to reduce debt and invest in key business areas, instilling confidence in its future direction.
- Impact on Digital Banking Platform: Under Veritas Capital’s ownership, NCR Voyix’s digital banking platform, which currently supports over 1,300 financial institutions and 20 million users, is poised for significant growth and innovation. The investment firm’s plans to expand and enhance the platform, focusing on its capacity for growth and innovation, should inspire optimism about the platform’s future.
- Market Context: NCR Voyix has faced challenges since becoming an independent entity in 2023, with its market value decreasing by around 20%. This transaction is seen as a move to enhance shareholder value and stabilize the company’s financial position. The sale is expected to significantly reduce NCR Voyix’s debt and provide a substantial cash influx, which could potentially improve its financial standing and future growth prospects.
NCR Voyix to Sell Digital Banking Division to Veritas Capital for Up to $2.55 Billion
NCR Voyix, a fintech firm in Georgia, is modifying its business structure. The company has agreed to divest its cloud-based digital banking unit to a subsidiary of Veritas Capital. As part of the agreement, NCR Voyix will be paid $2.45 billion in cash. Up to $100 million may be paid based on future performance, potentially elevating the total value of the deal to $2.55 billion. The transaction is anticipated to close by the end of 2024.
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Launched in 2014, NCR Voyix’s digital banking platform has expanded significantly. It serves 1,300 financial institutions with 20 million active retail and commercial banking users. The platform offers mobile and online banking, customer interaction tools, and personal financial management for retail clients. For commercial clients, it includes features like treasury services, business banking, and cash management solutions.
David Wilkinson, CEO of NCR Voyix, stated that Veritas Capital is the perfect new owner of its digital banking business, with its strong technology investment background. He noted that Veritas Capital is expected to continue developing leading products and solutions that will serve the needs of its financial institution customers well. This sale will enhance value for their shareholders by improving their financial standing and allowing them to concentrate on their primary restaurant and retail clients.
Ramzi Musallam, Managing Partner and CEO of Veritas commented that the digital-first banking platform is a leader in mobile and online banking, offering outstanding value and substantial potential for growth. He expressed confidence that the platform provides an attractive investment opportunity in essential solutions that will support both community and larger financial institutions and deliver innovative banking tools to millions of customers.
The company’s recent financial supplements revealed that average revenues per unit in the segment increased by 6% yearly, with the active user count rising 3% to 19.8 million. NCR Voyix reported that its digital banking revenues grew 9% in the second quarter, reaching $154 million. However, the company’s overall revenues fell by 7%, totaling $876 million.
During a conference call, CEO David Wilkinson highlighted that digital banking provides a unique end-to-end service spanning both physical and digital channels.
Brendan Tansill, Executive Vice President and President of NCR’s digital banking unit, discussed the general perception of private equity firms. He noted two common scenarios: one where the firm minimizes costs aggressively to boost cash flow and plans a rapid exit, and another where the firm invests significantly in the target to spur long-term growth through enhancements in technology and personnel.
According to Tansill, Veritas Capital exemplifies the latter approach, having invested in technology companies for over twenty years. Veritas focuses intensely on a limited number of investments, each supported by substantial financial commitment.
Tansill also mentioned considerable interest in the business, which allowed them to select a strategic partner thoughtfully.
This sale is part of the company’s strategy to streamline operations and focus on its primary software and services targeted at global restaurants and retailers. NCR Voyix intends to use the proceeds from this sale to meet specific financial targets, such as lowering its debt, enabling more focused investments in its key business sectors, and potentially expanding its offerings in the restaurant and retail sectors.
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NCR Voyix was previously a division of NCR Corp before the latter divided into two separate entities in 2023: Voyix, which specializes in digital commerce, and NCR Atleos, which concentrates on automatic teller machines (ATMs). Since becoming an independent entity last year, NCR Voyix has faced challenges in the competitive fintech and digital banking industries, leading to a decrease in its market value by approximately 20%. As of early July, its market capitalization was around $4.6 billion, debt included.
About NCR Voyix
NCR Voyix is a global technology company that delivers digital commerce solutions to the restaurant, digital banking, and retail sectors. It is a leading point-of-sale (POS) software provider, servicing over 100,000 retail and restaurant stores and caters to grocery and convenience stores.
NCR Voyix assists brands in gaining loyal customers, managing their operations, and increasing sales. The company works closely with clients to streamline and manage their technology systems, helping their businesses thrive. NCR Voyix’s platform-led SaaS and services enhance the functionality of retail stores, restaurant operations, and digital banking experiences. The company’s main office is in Midtown Atlanta, Georgia, and it employs around 15,000 people in 35 countries worldwide.
Conclusion
The sale of NCR Voyix’s digital banking division to Veritas Capital for $2.45 billion marks a significant shift as it refocuses on its core retail and restaurant sectors. Given the platform’s extensive reach and user base, the transaction is poised to influence the broader fintech and digital banking landscapes. NCR Voyix’s decision aligns with its strategy to streamline operations and strengthen its financial position, particularly by reducing debt.
Meanwhile, Veritas Capital’s acquisition reflects its commitment to investing in technology-driven solutions with long-term growth potential. This deal, expected to close by year-end, is a crucial move for both companies as they pursue their strategic goals.
