Diebold in Talks To By German ATM Maker Wincor Nixdorf for $1.8 Billion

Diebold Inc., the second-largest U.S.-based ATM manufacturer after NCR Corp., disclosed over the weekend that it is in discussions to buy Paderborn, Germany-based ATM maker Wincor Nixdorf AG.

North Canton, Ohio-based Diebold issued a statement Saturday confirming that it has a non-binding agreement with Wincor Nixdorf “regarding the key parameters of a potential strategic business combination.” Under the proposal, Diebold would buy all of Wincor Nixdorf’s shares for €52.50 ($59.43 per share) in cash and Diebold stock, valuing the deal at $1.77 billion.

Diebold’s offer represents a 35% premium over Wincor Nixdorf’s share price at Friday’s close of €38.90. Diebold said it would have no further comment until the deal is consummated or talks between the companies end.

In a brief statement, Wincor Nixdorf said the companies on Sept. 24 entered into a “term sheet,” or preliminary talks, regarding a possible combination. “The term sheet is legally non-binding and the entry into the transaction is still subject to material conditions and analyses, in particular the completion of mutual due diligences,” the statement says.

Diebold posted total revenues of $3.05 billion last year, up nearly 7% from $2.86 billion in 2013. Some $2.2 billion of 2014’s revenues came from the company’s ATM unit, called Financial Self-Service, but year-over-year growth was only 1.4%. Most of Diebold’s other revenues come from security products. Net income swung to $114.4 million from a $181.6 million loss in 2013.

The acquisition would give Diebold a stronger presence in faster-growing regions than North America, which accounted for $1.41 billion in revenues last year, 46% of the company total, but where sales fell fell half a percent year over year. Diebold’s Europe-Middle East-Africa region, which brought in almost 14% of sales, $421.1 million, saw growth exceed 16%. Sales in Brazil jumped 34% to $482.5 million.

Wincor Nixdorf, which also sells security systems, other banking hardware, kiosks, and hardware and software for retailers, reported sales of €2.47 billion ($2.8 billion at today’s exchange rates), flat from a year earlier, and profits of €104 million ($118 million) in its last full fiscal year, up 18%. Wincor Nixdorf sells in the United States, but about 70% of the company’s sales come from Europe, according to Bloomberg.

“This deal, if it does come to fruition, is a major change to the ATM industry landscape, particularly in Europe and certain emerging markets,” ATM and payments-industry consultant Sam Ditzion, chief executive of Boston-based Tremont Capital Group, tells Digital Transactions News by email. “If the deal does happen, and the two companies integrate in an effective way, the combination would be much stronger than the two of them remaining on their own.”

Competitor Duluth, Ga.-based NCR Corp. posted total revenues of $6.59 billion in 2014, including $3.56 billion from its Financial Services unit that makes ATMs. NCR also sells payment kiosks and software systems for retailers and the hospitality industry.

Meanwhile, Diebold on Monday said it filed a complaint with the U.S. International Trade Commission and in federal court in Ohio alleging that Korea-based rival Nautilus Hyosung Inc. and its subsidiary Nautilus Hyosung America Inc., infringe Diebold patents “in many of its ATMs.” Diebold wants a ban on Hyosung imports to the U.S. and damages. Hyosung could not be immediately reached for comment.

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