Excerpts from WSJ:
"WSJ: NCR to Sell Three Factories, Inventory; Tightens Focus on Software and Services
By Raju Narisetti
Staff Reporter of The Wall Street Journal
NCR Corp. agreed to sell important manufacturing operations to Solectron Corp., hoping that a tighter focus on software and services will allow the company to post revenue growth and return to profitability.
Under the transaction, Solectron will buy three NCR factories, along with product inventory, for $100 million. Solectron, of Milpitas, Calif., also agreed to hire about 1,200 of NCR's employees, or about 3% of the total.
Both companies also agreed to a five-year supply agreement under which Solectron will assemble computers and retailstore equipment, such as scanners and cash registers, to NCR specifications. Solectron, which provides manufacturing services to other companies, is acquiring NCR plants in Atlanta; Columbia, S.C., and Dublin, Ireland.
...
...
Mr. Nyberg said Solectron can make the products "more cost efficiently" and estimated the agreement would boost NCR's gross profit by about $24 million a year. The outsourcing agreement covers businesses that account for $1.6 billion of NCR's total revenue of about $7 billion. NCR will continue to make automatedteller machines and related financial-industry products.
Wall Street-whose initial enthusiasm for NCR had waned considerably this year-applauded the move. On a day when most technology stocks fell, NCR's shares rose $1.56, or about 6%, to close at $29 in New York Stock Exchange composite trading, though they are way off their 52-week high of $41.375. Solectron shares closed at $37.25 each, up $1.125.
..." |
