NEW YORK -NCR Corp is in advanced talks to merge its automatic teller (ATM) business with cash management firm Brink's Co, creating a combined company worth close to $12 billion, including debt, people familiar with the matter said.

The deal, structured as a Reverse Morris Trust, would allow NCR to merge the ATM business at a $5.5 billion valuation with Brink's and give a large chunk of the combined company to NCR shareholders tax free, the sources said.

That valuation equates to seven times the projected earnings before interest, taxes, depreciation and amortization of NCR's ATM business in 2024, the sources added.

Brink's, which is valued at about $6.2 billion including debt, moves cash around the world for its clients and provides ATM services among other things. It approached financial technology and software company NCR in recent months with the deal proposal, and negotiations could conclude as early as next week, the sources said.

The sources cautioned that an agreement is not certain and asked not to be identified because the matter is confidential.

Representatives for NCR and Brinks were not immediately available for comment.

NCR shares rose 9% on the news, while Brink's shares dropped 10% in afternoon trading in New York on Wednesday, reflecting the transfer of value in the potential transaction from Brink's as an acquirer of the ATM business to NCR as a seller.

NCR said in September 2022 that it planned to separate its digital commerce business from its ATM division in a tax-free manner. The commerce business NCR will retain provides payments software to the retail, hospitality and digital banking industries.

In total, NCR generated revenue of $7.8 billion in 2022, up from $7.2 billion in 2021.

The company announced earlier on Wednesday that its CEO Michael Hayford would retire upon the separation of the businesses.

The Brink's management team, led by CEO Mark Eubanks, will lead the newly created company should the deal be agreed, the sources said.

Based in Richmond, Virginia, Brink's makes most of its revenue helping companies transport cash and operating ATMs. It posted revenue of $4.5 billion in 2022, up from $4.2 billion in 2021.

  - Reuters