NCR May Be Up For Grabs As Thoma Bravo Prepares Bid

The mobile payments market has quite a bit of potential, and people out there are wondering where it will go next. New reports, however, have put one clear price tag on at least part of the mobile payments market, as a Reuters report suggests, Thoma Bravo may be assembling a bid for NCR, a staggering $9 billion.

According to “people familiar with the matter,” Thoma Bravo has been quietly talking to private equity investors about a bid for NCR, the widely known and widely used ATM maker. Thoma Bravo has also been seen talking to nearly a dozen different banks about financing, and the talks in question are said to be “advanced” in nature. The bid would come in at around $9 billion, a price that is said to include at least some debt. In turn, the news threw the market into something of frenzy, as NCR’s stock was halted for volatility on Friday.

This is likely to prove good news for NCR, as reports suggest that the company had been exploring several options after receiving pressure from the shareholder base. With other firms like Blackstone Group and Carlyle Group also reportedly staging buyouts in recent weeks—the bids were said to have hit a snag in that the duo couldn’t get enough together to offer a successful bid—and that makes Thoma Bravo’s bid all the more noteworthy.

The report suggests that Thoma Bravo’s buyout offer would represent in the neighborhood of 6.5 times NCR’s annual earnings, before modifiers like amortization, depreciation, interest and taxes step in. Word from the New York Post, meanwhile, suggests that the bid may be in trouble, with one source “close to the deal” noting that “there is not enough financial information to make a binding bid.”

That’s a huge amount of money regardless of how many times annual earnings it represents. In actuality, it underscores the value the market puts on mobile payment options. Sure, an ATM maker isn’t exactly a mobile payment system, but it does provide the means to get cash, which has been a mobile payment system since the advent of paper currency. By like token, some might also consider the purchase of NCR to be something of an investment in traditionalism; since NCR is primarily a maker of ATMs, it could be that companies are putting a bet out that mobile payment systems won’t completely swamp banks, and there will be more than enough business in that sector to keep NCR up in the billion dollar-level in terms of annual revenue.

This is a strange new development, however, and will require some watching over the next few weeks to see how it all pans out. It could be that NCR is overvalued, or that there’s something much bigger waiting in the wings that we’ve yet to see.