The leading technology and solutions provider for retail and financial service industries, NCR Corp. (NCR) recently purchased a $4 million stake in Document Capture Technologies Inc. (DCMT) through a private placement deal at $1.036 per share. Document Capture provides design, development and sale of USB-powered scanning technologies,
This investment gives NCR the right to designate one of its members to the Board of Document Capture. Moreover, the company was also granted another two-year option to purchase $4.0 million of common stock at the decided price. The amount received from the sale of this equity stake will be used by Document Capture to fund the enhancement of its Document Capture operation for research and development, as well as for funding its strategic investment transaction.
NCR Corp. appreciates the depth and quality of Document Capture’s products and technical solutions. More specifically, Document Capture’s core technologies will augment NCR’s existing solutions portfolio, facilitating rationalization of costs and improvement of the consumer experience. We believe that the adoption of this new technology will help the company penetrate deeper into the market, thereby enhancing its customer base.
Apart from grabbing substantial stakes in other companies, NCR has also adopted strategic acquisitions as its route to growth. The company is planning to tap new markets through smaller acquisitions. To grow its self-service offering in the digital media merchandising market, NCR acquired Touch Automation, LLC and Ambient Partners. It used the acquired technology to launch NCR Xpress Entertainment, a next-generation multi-channel entertainment kiosk solution.
In a move to further expand customers’ options for delivery of digital entertainment, NCR announced a licensing agreement with e-Play that will add the ‘bare-disc’ technology to NCR’s existing global self-service technology portfolio and assist its development as an independent service operator in the entertainment market.
In November 2009, NCR disclosed that it purchased the assets of Netkey Inc., a market-leading provider of kiosk and digital signage software applications, for an undisclosed amount. We believe that after the acquisition, NCR will integrate Netkey’s software with its own technologies to deliver world class enterprise solutions, including both hardware and software solutions to its clients. This acquisition is expected to provide NCR with a good digital signage application platform, built on the same platform as Netkey’s kiosk applications, thereby helping the deployment and support of NCR’s solutions.
The company posted decent first-quarter results, with both revenues and earnings growing modestly from the year-ago quarter. Revenues increased across all geographic regions, driven by improvement in macroeconomic conditions, especially in the retail, financial services and hospitality industries. Additionally, we are encouraged by the company’s market leadership, successful acquisitions, new product introductions and new business ventures. We expect its robust business model and aggressive cost-cutting measures to drive growth in the near to medium term.
We have a Neutral rating on the stock, with a short-term Zacks #3 Rank (‘Hold’).
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