NCR acquires retail software co Retalix

The deal for the Ra'anana based company is for a cash transaction of at least $650 million.

NCR Corp. (NYSE: NCR) last night announced that it is acquiring Retalix Ltd. (Nasdaq: RTLX; TASE: RTLX), a global provider of innovative retail software and services. NCR said that, "The acquisition is for a cash purchase price of $30 per Retalix share, implying a transaction value of approximately $650 million." This was a 50% premium on the share's closing price on Tuesday. NCR said that the deal is expected to be completed in the first quarter of 2013.

Retalix's share price jumped 34.7% on Nasdaq yesterday to $29.50, giving a market cap of $727.94 million and rose by a further 0.78% in after-hours trading to $29.73.

Retalix is headquartered in Ra'anana. The big winners in the Retalix acquisition, which could ultimately be worth as much as $800 million, are the Alpha Group of former Amdocs Ltd. (NYSE: DOX) senior executives who hold a 19.5% stake in the company, and Israel's largest private equity fund First Israel Mezzanine Investors Fund (FIMI) headed by CEO Ishay Davidi, which holds a 18.16% stake. Parties of interest include some of Israel's leading institutional investors such as Menorah Mivtachim Holdings Ltd. (TASE: MORA), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), the provident funds of Migdal and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), and Migdal's mutual funds.

In confirming the acquisition, NCR said, "The addition of Retalix will strengthen NCR's global leadership position in the retail industry, and builds upon its successful integration of Radiant Systems into the NCR portfolio of solutions."

NCR chairman and CEO Bill Nuti said, "Retalix is a strong, strategic fit for NCR and the combination of our two companies will drive significant value for both our shareholders and customers."

Retalix CEO Shuky Sheffer said, "I am very excited about today's announcement. 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. 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."

Retalix's software and services are deployed in over 70,000 retail locations with more than 400,000 customer touch points in over 50 countries that transact billions of dollars in annual sales across its platform. Earlier this week, Retalix announced a major deal to provide services to Woolworth's, Australia's largest retail chain.

NCR said that it also expects to use Retalix's software to accelerate the development of NCR's enterprise software platform, creating new software modules that can be used across the retail industry and leveraged across NCR's financial, travel and hospitality industries on a global scale.

Two weeks ago, Retalix reported revenue of $70.15 million for the third quarter of 2012, up 15% from $61.6 million in the corresponding quarter of 2011. Non-GAAP profit was $5.3 million ($0.21 per share) compared with $7.7 million ($0.31 per share) in the corresponding quarter. GAAP profit was $3.6 million ($0.14 per share) compared with $5.5 million ($0.22 per share) in the corresponding quarter of 2011.

J.P. Morgan acted as exclusive financial advisor and Morrison & Foerster LLP and Amit, Pollak, Matalon & Co. acted as legal counsel to NCR on the transaction. Jefferies & Co., Inc. acted as financial advisor and Meitar Liquornik Geva & Leshem Brandwein acted as legal counsel to Retalix Ltd. on the transaction.

Published by Globes [online], Israel business news - - on November 29, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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