Investopedia: NCR Buys Its Way Into Another Vertical

Sometimes, organic growth just takes a little too long, or costs a little too much. NCR (NYSE:NCR), a maker of a variety of ATMs, self-service kiosks and point-of-sale terminals, announced that it has reached a deal to acquire Radiant Systems (Nasdaq:RADS) in an all-cash deal. Assuming this deal goes through to completion, NCR will significantly bolster its hospitality market presence and give it a third major industry group alongside finance and retail. 

NCR's Deal  
NCR announced that it will be acquiring Radiant Systems in a cash deal that values Radiant at $28 per share - about a 30% premium for Radiant shareholders. At a deal value of $1.2 billion, Radiant is going out for a little bit more than three times the forward revenue estimate and a trailing EV/EBITDA ratio around 15. That's a pretty healthy valuation, relative to Radiant's historical multiples, not to mention its likely forward free cash flow. (For related reading, see Taking Stock Of Discounted Cash Flow.)

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