NCR to Spin Off Data Warehouser Teradata

Data warehouse rival Netezza describes NCR's Teradata spinoff as being good for competition in the industry.

NCR, the worlds leading ATM and retail systems maker, revealed Aug. 28 that its board of directors has set Sept. 30 as the date for the previously announced spinoff of its Teradata data warehousing business.

NCR announced back on Jan. 8 that it intended to split off Teradata—the worlds largest data warehousing software and hardware provider—into a separate company.

The distribution of Teradata common stock is scheduled for Sept. 30, by way of a pro rata stock dividend to NCR stockholders of record as of the close of business on Sept. 14, 2007, which is the "record" date for the distribution.

The NCR board also declared a dividend of one share of common stock of Teradata Corp. for each share of NCR common stock held.

"We have been diligently preparing for the strategic separation over the past several months and are very pleased to have reached this important point in the process," Bill Nuti, President and CEO of NCR, based in Dayton, Ohio, said in a statement.

"Teradata and the new NCR operate in different markets, each with solid prospects for the future. But they have markedly different business models," Nuti said.

Nuti took over in August 2005 after Mark Hurd left to run computer maker Hewlett-Packard.


Click here to read more about Teradatas data warehousing analytics.

Teradata, also based in Dayton, sells data warehousing software, which is used to comb vast amounts of data to analyze retail buying patterns and other types of business trends. It had sales of $1.5 billion and operating income of $309 million in 2005, and has had the most sales of any data warehousing provider in the world during the last few years. The divisions revenue rose 5 percent to $378 million in the third quarter.

Jit Saxena, CEO of data warehouse appliance maker Netezza—a key Teradata competitor—told eWEEK that the NCR split into two companies will be good for the data warehousing industry as a whole.

"Any time you have good, pure-play companies competing in the marketplace, thats good for the customer," Saxena said, in Framingham, Mass. "Now we have one more good one. This means more innovation, and this is good in the vibrant data warehousing marketplace we have now."

Mike Koehler, who will serve as president and CEO of Teradata when it becomes an independent public company, said he believes Teradata is well-positioned to generate value for shareholders.

"We are a global leader in enterprise data warehousing, including enterprise analytics and technologies and services, with the product offering, diversified customer base and financial strength to build on our track record of consistent performance," Koehler said.

NCRs core business sells ATMs, retail checkout equipment and other specialized computer systems. It rang up sales of $4.5 billion and operating income of $251 million in 2005.

NCR, which employs about 29,700 people worldwide, has received a ruling from the Internal Revenue Service indicating that the spinoff will qualify as a tax-free distribution for U.S. federal income tax purposes to NCR and its stockholders.

Teradata is expected to trade on the New York Stock Exchange under the trading symbol "TDC." NCRs common stock will continue to trade on the NYSE under the symbol "NCR."


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Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...