This week, NCR Corp (NYSE:NCR) announced that it will spin-off its Teradata division, which is a top player in data warehousing. NCR, on the other hand, will focus on its self-service business, such as ATMs, kiosks and so on.
The deal should take six to nine months to complete. However, according to a report from The Daily Deal [a paid service], Teradata may not even hit the public markets. That is, it could be bought-out.
By private equity firms? Well, given Teradata's cash flows – and long-term contracts – it would be attractive to a financial buyer. But, the company would also make a great fit for major tech companies, such as Oracle (Nasdaq: ORCL), IBM (NYSE: IBM) and even Hewlett-Packard (NYSE: HPQ). All of these companies have been quite acquisitive.
Valuation for Teradata is tough to determine – with a range of $2 billion to $4.5 billion. Although, given the future growth prospects for the company, it's a good bet that the valuation is at the top end.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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