(Reuters) — Thoma Bravo LLC has been speaking to some of its largest private equity investors about putting together a bid for NCR Corp (NCR.N) that could value the ATM maker at around $9 billion, including debt, according to people familiar with the matter.
Thoma Bravo is also in advanced talks with close to a dozen banks about securing debt financing for a bid for NCR that could come in the next few days, the people said this week. The deal would be this year’s largest leveraged buyout.
NCR has been exploring options in recent months in light of shareholder pressure
Last month, Blackstone Group LP (BX.N) and Carlyle Group LP (CG.O), the world’s two largest private equity firms, joined forces to outbid other buyout firms in an effort to acquire Duluth, Georgia-based NCR, sources told Reuters at the time.
While Blackstone and Carlyle remain interested in NCR, they have carried out further due diligence and are now skeptical over whether they can offer enough for a successful bid, according to the sources.
Thoma Bravo is seeking to borrow around 6.5 times NCR’s annual earnings before interest, tax, depreciation and amortization, one of the people said. Thoma Bravo would have to raise more than $2 billion in equity for its offer, the people added.
Among the investors that Thoma Bravo has reached out to are Ontario Teachers’ Pension Plan and GIC Private Ltd, Singapore’s sovereign wealth fund. It is not clear which investors have responded to
Thoma Bravo’s call and if the buyout firm will succeed in putting together a bid that NCR will accept, the people cautioned.
Thoma Bravo and Blackstone declined to comment, while NCR and Carlyle did not respond to requests for comment.
In April, Thoma Bravo completed raising a $1.1 billion “top off” fund that it can tap for deals together with the remaining capital from its previous $3.7 billion buyout fund. If Thoma Bravo succeeds in its bid for NCR, it would be its largest deal by far.
Marcato Capital Management has been calling on NCR since last year to explore strategic alternatives and now holds a seat on its board of directors. And activist investor Jana Partners has reported a 7 percent passive stake.
NCR has been trying to expand into the software space. It recently launched a cloud-based software system for ATM machines called Kalpana that is meant to replace outdated PC software on ATMs and help ATM owners cut costs. It also makes self-checkout machines.
Retailers, which are some of NCR’s biggest customers, have been cutting back on spending, which hurt NCR’s revenue in the first quarter, NCR executives said on their last earnings call.