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ATLANTA - NCR (NYSE:VYX) Voyix Corporation (NYSE: VYX), a global provider of digital commerce solutions, has finalized the divestiture of its Digital Banking business to private equity firm Veritas Capital. The transaction, valued at $2.45 billion in cash, was completed with an additional contingent consideration of up to $100 million.
The sale marks a strategic refocusing for NCR Voyix, as it aims to concentrate on its primary restaurant and retail sectors. "The completion of this transaction represents a significant step forward for the Company as we narrow our focus on our core restaurant and retail businesses to drive enhanced long-term value for shareholders," stated David Wilkinson, CEO of NCR Voyix.
The Digital Banking business, now rebranded as Candescent, has grown to become a market leader under NCR Voyix's umbrella. Brendan Tansill, CEO of Candescent, expressed optimism about the company's future growth, "We look forward to continuing our growth journey as we expand our value proposition as a standalone company under our new brand, Candescent."
NCR Voyix, headquartered in Atlanta, Georgia, serves customers in over 30 countries, providing cloud-based platforms and services to retailers and restaurants. Candescent, now the largest independent digital banking platform in the United States, supports over 1,300 financial institutions and boasts more than 29 million registered users.
The press release includes forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, indicating expectations for the company's business trajectory following the sale. However, these statements are subject to risks and uncertainties that may cause actual results to differ materially.
This news is based on a press release statement, and the information is provided without endorsement of the claims. Investors are advised to consider the risks outlined in NCR Voyix's regulatory filings with the U.S. Securities and Exchange Commission, which detail factors that could influence the company's actual performance.
In other recent news, NCR Voyix has been making significant strides in its strategic shift towards software and services. The company recently reported a 5% increase in normalized software revenue for Q2 2024, while services revenue saw a slight 2% decrease. As part of its broader strategy to reduce debt, NCR Voyix sold its Digital Banking business for $2.45 billion, a move that was followed by a partnership with Ennoconn Corp for hardware solutions and a cost-saving program that cut 800 jobs.
The company's strategic pivot was further highlighted by Oppenheimer maintaining its Outperform rating and $19.00 price target for NCR Voyix. This follows the company's sale of its Digital Banking business and plans to use the funds to significantly reduce debt. The company's CEO, David Wilkinson, discussed these strategic moves during Oppenheimer’s 27th Annual Technology, Internet & Communications Conference.
In addition to these developments, NCR Voyix is focusing on platform conversions, market share growth, and investments in its Voyix commerce platform. The company aims to achieve a 20% EBITDA margin and 40% free cash flow conversion by 2025. Lastly, NCR Voyix updated its 2024 outlook with pro forma revenue of approximately $2.15 billion and pro forma adjusted EBITDA of approximately $430 million. These are recent developments that further illustrate the company's strategic shift and financial trajectory.
InvestingPro Insights
As NCR Voyix Corporation (NYSE: VYX) refocuses on its core restaurant and retail businesses following the divestiture of its Digital Banking segment, investors should consider some key financial metrics and insights from InvestingPro.
The company's market capitalization stands at $1.98 billion, reflecting its new streamlined structure. Despite the strategic move, VYX faces some challenges. InvestingPro Tips highlight that the company is not profitable over the last twelve months, and analysts do not anticipate profitability in the current year. This aligns with the reported basic EPS (Continuing Operations) of -$4.15 for the last twelve months as of Q2 2023.
However, it's worth noting that VYX has shown significant revenue growth, with a 108.31% increase in the last twelve months as of Q2 2023, reaching $3.71 billion. This robust top-line growth could be a positive sign as the company focuses on its core sectors.
The stock's volatility, as indicated by another InvestingPro Tip, suggests that investors should be prepared for potential price fluctuations as the market digests the impact of the divestiture and the company's new direction.
For a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable for investors evaluating VYX's future prospects in light of this significant transaction.
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