NCR's retail software and services portfolio got a major boost yesterday as the company announced an agreement to acquire Israel-based Retalix Ltd. for approximately $650 million.
The Retalix acquisition builds upon NCR's integration of Radiant Systems into its arsenal of solutions and demonstrates NCR's strategy and transformation to a hardware-enabled, software-driven business model, the company said in the announcement.
"With the acquisition of Retalix, I don't know of another company on the planet that has the ability to talk to a customer about a fully integrated end-to-end solution connecting hardware platforms, software and services," said NCR CEO Bill Nuti in a conference call. "This is a great fit for us."
He added that the deal is "an absolute growth plank for us. This acquisition strongly supports our goal of having a $1 billion business just in software."
Nuti also said that the Retalix deal gives NCR's customers what they have been asking for and strengthens its omni-channel offerings.
"Much of the market is interested and eager for that kind of end-to-end capability from someone like NCR," added Scott Kingsfield, NCR's SVP and GM of retail, during the conference call. "That will be our focus, to look for ways to bring our mutual assets to our customer bases."
Retalix's software and services are deployed in more than 70,000 retail locations in more than 50 countries, totaling billions of dollars in annual sales across its platform, having provided solutions for companies like Tesco, Sainsbury's, Publix and Tiffany & Co.
According to NCR, Retalix's strength with blue-chip retailers will be highly complementary to NCR, enabling additional sales and leveraging software modules across its financial, travel and hospitality industries.
NCR said the transaction, expected to be complete in the first quarter, will be financed through a combination of cash and debt and is expected to add to adjusted earnings next year.
"Combining Retalix's impressive team and portfolio with NCR will create a powerful enterprise-class software platform capable of delivering a sustained competitive advantage in the retail industry," said Shuky Sheffer, CEO of Retalix, in prepared remarks on the acquisition. "Together, we will create a talent pool and solutions portfolio that will be richer than anything available before, enabling our customers to deliver a superior omni-channel shopping experience. I am proud of our achievements and strongly believe that this is a great move that will benefit our customers, employees and shareholders."
Read more about hardware and software manufacturers.