Subject: NCR Announces Strategic Partnership with Blackstone Including $820 Million Equity Investment to Accelerate NCR's Transformation - NCR
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, <[email-masked]>, "Joan Mayer" <[email-masked]>
Date: Sun, 15 Nov 2015 21:19:48 -0500

NCR Announces Strategic Partnership with Blackstone Including $820 Million
Equity Investment to Accelerate NCR's Transformation - NCR

http://www.ncr.com/news/news-releases/company/ncr-announces-strategic-partnership-with-blackstone-including-820-million-equity-investment-to-accelerate-ncrs-transformation

NCR Announces Strategic Partnership with Blackstone Including $820 Million
Equity Investment to Accelerate NCR’s Transformation NCR to Repurchase Up
to $1 Billion in Common Stock

*DULUTH, Ga.—November 12, 2015 –* NCR Corporation (NYSE: NCR) today
announced that it has entered into an agreement with Blackstone (NYSE: BX),
one of the world’s leading investment and advisory firms, under which
affiliates of Blackstone will invest $820 million in NCR in the form of
perpetual convertible preferred shares. The Company expects its
relationship with Blackstone to accelerate NCR’s ongoing strategic
transformation into an integrated software and services company. NCR will
use the Blackstone investment to help fund a repurchase through a
self-tender of up to $1 billion of its common stock.

“After concluding a comprehensive review of strategic alternatives, the NCR
Board has determined that executing our strategic plan with Blackstone’s
assistance is the best way to accelerate NCR’s transformation and build
long-term shareholder value,” said NCR Chairman and CEO Bill Nuti.
“Blackstone is an experienced technology investor with a long-term
perspective that can help us continue to drive our higher-margin
software-related revenue, deliver world-class service globally, optimize
our manufacturing processes and supply chain, and rationalize costs. This
investment is a strong vote of confidence in our long-term strategy and
future growth potential, and it will enable NCR to return significant cash
to those shareholders who want to monetize their investment in the near
term while preserving our ability to fund growth opportunities and increase
shareholder value in the years ahead.”

In connection with the investment, NCR will expand its Board of Directors
from 9 to 11 directors and appoint Chinh Chu, Senior Managing Director, and
Greg Blank, Managing Director, of Blackstone to the NCR Board upon the
closing of the transaction, which is expected to occur by early December.

Mr. Nuti continued, “We are delighted to welcome Chinh and Greg to our
Board. Blackstone has a well-deserved reputation as a strong corporate
partner, and we expect the Board will benefit from Chinh’s and Greg’s
strategic and financial expertise. NCR will enjoy the full resources of
Blackstone’s unique platform of operational support and is well positioned
to leverage Blackstone’s global network as we look to expand our
partnership network and evaluate new growth opportunities.”

“NCR has made tremendous progress removing legacy barriers to growth and
executing a corporate transformation focused on extending its product
capabilities into new areas of software and services. NCR is well
positioned to continue to win market share and deliver exceptional value to
its customers,” said Chinh Chu, Senior Managing Director, Private Equity,
at Blackstone.

“We are pleased to partner with NCR at such a pivotal time and believe it
has the right strategy and vision to meet the needs of a rapidly changing
market,” said Greg Blank, Managing Director, Private Equity, at Blackstone.
“Chinh and I look forward to working with the NCR Board and management team
to increase value for all shareholders.”

*Accelerating NCR’s Transformation and Supporting Growth*

Blackstone is an experienced investor with proven technological and
operational expertise, and the strategic relationship will provide
significant resources to enable NCR to:

   - Grow recurring revenue through software development and services
   initiatives and a continued transition to cloud-based offerings
   - Improve services productivity and customer satisfaction through a
   continuing shift to innovative, higher-margin, value-added service offerings
   - Expand margins through lean manufacturing, product lifecycle
   management and procurement processes
   - Optimize hardware and supply chain assets
   - Preserve financial flexibility to drive sustainable growth going
   forward.

NCR’s shareholders will be able to participate, along with Blackstone, in
the Company’s significant growth opportunities in the rapidly expanding
market for integrated solutions.

*Share Repurchase*

NCR intends to repurchase up to $1 billion of its common shares through a
modified “Dutch Auction” tender offer at an expected price range between
$26.00 and $29.50 per share expected to commence November 13, 2015. The
Company will fund the tender offer with the proceeds of the Blackstone
investment, cash on hand and borrowings from its revolving facilities.
Further details, including the terms and conditions of the tender offer,
will be filed with the Securities and Exchange Commission.

*Blackstone Investment Terms*

   - Blackstone will purchase $820 million of convertible perpetual
   preferred stock, which is convertible into shares of NCR common stock at a
   conversion price of $30.00 per share.
   - The conversion price represents an 18% premium to the 30-day
   volume-weighted average price ended November 11, 2015.
   - The preferred stock carries a 5.5% dividend, which will be payable in
   kind for the first four years following issuance.
   - On an as-converted basis, the preferred stock will represent
   approximately 17% of NCR’s shares outstanding after giving effect to the
   Blackstone investment and share repurchase (assuming the tender offer is
   fully subscribed at the midpoint of the price range).
   - Blackstone may convert the preferred into common at any time and may
   require NCR to repurchase the preferred after 8-1/2 years and every 3 years
   thereafter. The preferred will be mandatorily convertible into common if
   the stock price exceeds certain thresholds.

Additional information regarding the investment will be included in a Form
8-K to be filed today by the Company with the Securities and Exchange
Commission.

“This long-term equity investment is an attractive security that will
benefit our company and shareholders alike,” said NCR CFO Bob Fishman. “The
strategic partnership with Blackstone, which supports our long-term
strategy, enables us to repurchase a significant amount of our common stock
in the short term, while the terms of the investment preserve our balance
sheet flexibility.”

*Director Biographies*

Chinh Chu is a Senior Managing Director of Blackstone in the Private Equity
Group based in New York. He has led Blackstone’s investments in
AlliedBarton, Celanese, Graham Packaging, Interstate Hotels, Kronos, LIFFE,
Nalco, Nycomed, and Stiefel Laboratories. Mr. Chu graduated with a
bachelor’s degree in finance from the University of Buffalo. He currently
serves as a director of Biomet, Freescale, HealthMarkets, and Kronos.

Greg Blank is a Managing Director of Blackstone in the Private Equity Group
based in New York where he focuses on investments in the technology sector.
Mr. Blank has been involved in the execution of many of Blackstone’s
investments, including most recently in Kronos, Ipreo, and Optiv. Mr. Blank
graduated with a bachelor’s degree in economics from Harvard College and
received an MBA from the Harvard Business School. He currently serves as a
director of Ipreo, Optiv, Travelport, and The Weather Company.

J.P. Morgan, Atlas Strategic Advisors and BofA Merrill Lynch are acting as
placement agents and financial advisors to NCR, and Cravath, Swaine & Moore
LLP is serving as NCR’s legal advisor in the transaction.

Citi, Goldman, Sachs & Co., and RBC Capital Markets LLC are financial
advisors to Blackstone, and Kirkland & Ellis LLP is Blackstone’s legal
advisor in the transaction.

*Conference Call*

A conference call is scheduled for today at 8:00 a.m. ET to discuss today’s
announcement. Access to the conference call and accompanying slides, as
well as a replay of the call, will be available on NCR’s web site at
http://investor.ncr.com/. Additionally, the live call can be accessed by
dialing 888-215-6853, or 913-981-5550 for international participants, and
entering the participant passcode 7924084.

*About Blackstone *Blackstone is one of the world’s leading investment
firms. It seeks to create positive economic impact and long-term value for
its investors, the companies it invests in, and the communities in which it
works. Blackstone does this by using extraordinary people and flexible
capital to help companies solve problems. Its asset management businesses,
with over $330 billion in assets under management, include investment
vehicles focused on private equity, real estate, public debt and equity,
non-investment grade credit, real assets and secondary funds, all on a
global basis. Further information is available at www.blackstone.com.
Follow Blackstone on Twitter @Blackstone.

*About NCR Corporation *NCR Corporation (NYSE: NCR) is the global leader in
consumer transaction technologies, turning everyday interactions with
businesses into exceptional experiences. With its software, hardware, and
portfolio of services, NCR enables more than 485 million transactions daily
across the financial, retail, hospitality, travel, telecom and technology
industries. NCR solutions run the everyday transactions that make your life
easier.

NCR is headquartered in Duluth, Georgia with over 29,000 employees and does
business in 180 countries. NCR is a trademark of NCR Corporation in the
United States and other countries. NCR encourages investors to visit its
web site which is updated regularly with financial and other important
information about NCR.

Web site: www.ncr.com
Twitter: @NCRCorporation
Facebook: www.facebook.com/ncrcorp
LinkedIn: http://linkd.in/ncrgroup
YouTube: www.youtube.com/user/ncrcorporation

*News Media Contact*

NCR Corporation
Lou Casale, 212-589-8415
[email-masked]

*Investor Contact*

NCR Corporation
Gavin Bell, 212-589-8468
[email-masked]

*Forward-Looking Statements*

This release contains forward-looking statements. Forward-looking
statements use words such as “expect,” “anticipate,” “outlook,” “intend,”
“believe,” “will,” “should,” “would,” “could” and words of similar meaning.
Statements that describe or relate to NCR’s plans, goals, intentions,
strategies or financial outlook, and statements that do not relate to
historical or current fact, are examples of forward-looking statements.
Forward-looking statements are based on NCR’s current beliefs, expectations
and assumptions, which may not prove to be accurate, and involve a number
of known and unknown risks and uncertainties, many of which are out of
NCR’s control. Forward-looking statements are not guarantees of future
performance, and there are a number of important factors that could cause
actual outcomes and results to differ materially from the results
contemplated by such forward-looking statements, including factors relating
to: the successful closing of the investment by Blackstone and achievement
of its potential benefits; domestic and global economic and credit
conditions, including, in particular, market conditions and investment
trends in the retail industry, and economic and market conditions in China
and Russia; the impact of our indebtedness and its terms on our financial
and operating activities; our ability to successfully introduce new
solutions and compete in the information technology industry; the
transformation of our business model and our ability to sell higher-margin
software and services; our ability to improve execution in our sales and
services organizations; defects or errors in our products or problems with
our hosting facilities; manufacturing disruptions; collectability
difficulties in subcontracting relationships in emerging industries; the
historical seasonality of our sales; foreign currency fluctuations; the
availability and success of acquisitions, divestitures and alliances,
including the acquisition of Digital Insight; our pension strategy and
underfunded pension obligation; the success of our ongoing restructuring
plan; tax rates; compliance with data privacy and protection requirements;
reliance on third party suppliers; development and protection of
intellectual property; workforce turnover and the ability to attract and
retain skilled employees; environmental exposures from our historical and
ongoing manufacturing activities; uncertainties with regard to regulations,
lawsuits, claims and other matters across various jurisdictions; and the
other risks and uncertainties described in NCR’s filings with the
Securities and Exchange Commission (the “SEC”), including under the
headings “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in NCR’s annual report on
Form 10-K for the year ended December 31, 2014 filed with the SEC on
February 27, 2015 and in any of NCR’s subsequently filed Form 10-Qs. Any
forward-looking statement speaks only as of the date on which it is made.
NCR does not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

*Important Information*

This release is for informational purposes only and is not an offer to buy
or the solicitation of an offer to sell any securities of NCR. The tender
offer described in this release has not yet commenced, and there can be no
assurances that NCR will commence the tender offer on the terms described
in this communication or at all. If NCR commences the tender offer, the
tender offer will be made solely by an Offer to Purchase and related
materials, which NCR will file with the SEC. *Investors are urged to read
these materials when they become available, as well as any other relevant
documents filed with the SEC when they become available, carefully and in
their entirety because they will contain important information, including
the terms and conditions of the tender offer*. If NCR commences the tender
offer, it will file each of the documents referenced in this paragraph with
the SEC, and, when available, investors may obtain a free copy of them from
the SEC at its website www.sec.gov, or free of charge from NCR at
http://investor.ncr.com or by directing a request to Gavin Bell, Vice
President of Investor Relations, at 212-589-8468 or [email-masked].

Eric D. Schwerin
[email-masked]

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