JSE-listed Altron on Thursday said that its wholly owned subsidiary, Altron TMT (ATMT) entered into an agreement with NCR Corporation, through its wholly owned subsidiary Spark ATM Systems, for the sale of the ATM hardware and support business of ATMT’s Altron Managed Solutions (AMS) division (AMS ATM Hardware and Support Business) to NCR for a purchase consideration capped at $10-million.
The disposal of the AMS ATM Hardware and Support Business is aligned to the Altron Group’s strategy of being a capital light digital transformation and related solutions provider, with the proceeds of the sale applied to reduce the debt of the group.
The AMS division will continue to operate all remaining portfolios including its retail solutions, end-user computer support, cloud platform and software solutions, Altron said in a statement.
AMS ATM Hardware and Support Business has a long-standing channel solution provider programme agreement with NCR and is an authorised NCR solution provider.
The business comprises ATM hardware sales, implementation, licensing, repairs and maintenance and the NCR approved rework centre, as well as managed services for cash automation technologies.
The agreement remains subject to the fulfilment or waiver, by February 23, 2023, of the necessary consents, as required, to cede and assign customer and supplier contracts and/or arrangements related thereto; the conclusion of agreements and related approvals to facilitate the orderly transfer of the business, including transitional services, sub-letting/access to premises and intellectual property; and a new, separate agreement between ATMT and NCR relating to AMS’ retail solutions business which is being retained by AMS.
Further conditions include that at least 75% of key and critical employees, and/or 85% of all employees, predominantly involved in the business as at the signature date of the agreement, transfer with the business; ATMT provide an 18-month R46-million bank guarantee in favour of the purchaser in support of customary warranties and indemnities in the agreement; and all requisite regulatory approvals as required.
ATMT will retain the trade receivables, which amounted to R238.8-million in August 31, as at the end of the month following the fulfilment of conditions precedent.
NCR will collect the receivables in the ordinary course of business following the closing of the transaction and pay over the proceeds to ATMT.
The purchase consideration for the business will equal the net book value as at the end of the month following the fulfilment of conditions precedent of fixed assets net of lease financing, deposits, prepayments and inventory, which amounted to R191-million as at August 31, less trade payables, accruals and receipts in advance, which amounted to R191.5-million as at August 31.
The purchase consideration has been capped at a maximum of $10-million.
According to Altron, the net book value of the balance sheet items related to the transaction, as at August 31, amounted to R238.3-million, inclusive of receivables retained by Altron as part of the transaction.
For the six months ended August 31, the AMS ATM Hardware and Support Business generated revenue of R544.6-million, earnings before interest, taxes, depreciation and amortisation of R36.6-million and operating profit of R23.2-million.