Diebold And Wincor Nixdorf To Combine, Creating Premier Self-Service Company For Financial And Retail Markets

PR62649

NORTH CANTON, Ohio and PADERBORN, Germany, Nov. 23, 2015 /PRNewswire=KYODO JBN/ --

    - Companies have entered into a business combination agreement in which

      Diebold will launch a voluntary public tender offer for all of Wincor

      Nixdorf's outstanding shares

    - Brings together leading global innovators in banking and retail

      technologies in rapidly transforming industries

    - Combined company will deliver fully integrated and transformative

      solutions in value-added services, branch automation and omnichannel

      experiences

    - Both companies share a common strategic focus on growing services and

      software, and have highly complementary offerings, geographic presence

      and customer bases

    - Diebold will offer Wincor Nixdorf shareholders Euros 38.98 in cash plus

      0.434 Diebold common shares per Wincor Nixdorf share(1)

    - Transaction values Wincor Nixdorf, including net debt, at approximately

      $1.8 billion, or Euros 1.7 billion (2)

    - Transaction expected to yield approximately $160 million of annual cost

      synergies, and the combined company will target non-GAAP operating

      margin(3) in excess of 9 percent by the end of the third full year

      following completion of the transaction

Diebold, Incorporated (NYSE:DBD), a global leader in providing self-service

delivery, value-added services and software primarily to the financial

industry, and Wincor Nixdorf AG (FWB: WIN), a leading provider of IT solutions

and services to banks and the retail industry, today announced that the

companies have entered into a business combination agreement. Pursuant to the

business combination agreement, Diebold will launch a voluntary public tender

offer to all shareholders of Wincor Nixdorf.  Under the terms of the agreement,

Diebold will offer Wincor Nixdorf shareholders Euros 38.98 in cash plus 0.434

Diebold common shares per Wincor Nixdorf share(1). This transaction values

Wincor Nixdorf, including net debt, at approximately $1.8 billion, or Euros 1.7

billion(2).

Logo - http://photos.prnewswire.com/prnh/20080725/DIEBOLDLOGO

The combined company had pro forma revenue of approximately $5.2 billion, or

Euros 4.8 billion(4), for the trailing 12 months ended Sept. 30, 2015,

excluding revenue attributable to Diebold's North America electronic security

business, which it recently agreed to divest. Following completion of the offer

and subject to certain approvals, the combined company will be named Diebold

Nixdorf, with common shares publicly listed on the New York Stock Exchange and

the Frankfurt Stock Exchange. The combined company will have registered offices

in North Canton, Ohio, U.S. and will be operated from headquarters in North

Canton and Paderborn, Germany.  

The combination brings together leading innovators in value-added services,

branch automation and omnichannel experiences to create an industry leader

focused on the entire value chain -- consult, design, build and operate -- to

help financial institutions and retailers succeed in their business

transformation journey. The combined company will build upon the two companies'

shared vision that services and software drive the consumer experience and

enable customers to differentiate themselves in an evolving industry. The

combined company will pursue a growing total addressable market of

approximately $60 billion, according to independent market estimates and

Diebold internal analysis.

Combined Company to Deliver More Services and Innovation to the Market

"The rate of change we see in our industry is unprecedented, and by leveraging

innovative solutions and talent from both organizations we will have the scale,

strength and flexibility to help our customers through their own business

transformation," said Andy W. Mattes, Diebold president and chief executive

officer (CEO). "Our new company will be well positioned for growth in

high-value services and software -- particularly in the areas of managed

services, branch automation, mobile and omnichannel solutions -- across a

broader customer base. This combination was made possible through the successes

we have had and continue to create in the Diebold 2.0 transformation plan. We

have a history of collaboration with Wincor Nixdorf, and our shared approach

will help drive a successful integration and minimize disruption. I am very

excited about the many opportunities we will create together."

"The combination of Diebold and Wincor Nixdorf is an exciting opportunity for

both companies to shape the future of banking and retail solutions. Together,

we can even better leverage the potential of a rapidly changing banking and

retail market due to our strong combined R&D expertise. With our complementary

geographic presence, we will be even closer to customers worldwide. Our common

view of omnichannel software solutions will enable us to create a best-in-class

customer experience to support banks and retailers to cope with challenges of

digitalization," said Eckard Heidloff, CEO, Wincor Nixdorf. "Furthermore, we

are convinced that our employees will benefit from being part of an even

stronger, more global organization that is well positioned for the age of

digitalization."  

Highly Complementary Geographies, Customers and Solutions

The two companies share a complementary geographic reach across the Americas,

EMEA and within Asia, along with strong, trusted brands backed by best-in-breed

engineering. Diebold is a leading player in the Americas, whereas Wincor

Nixdorf is a leading player in Europe. These two regions are also key drivers

for innovation and digital transformation -- both in banking and retail.  

The combined company's collective capabilities and established global market

presence will offer a broader range of services and solutions across its

customer base. Growth in both the software and services segments is expected to

be accelerated by the combined, expanded installed base of nearly one million

automated teller machines (ATMs) worldwide to the benefit of the customers. The

combined company's strong service presence will also benefit Wincor Nixdorf's

retail business.

Agreement Approved by Boards of Both Companies

Under the terms of the business combination agreement, which has been approved

by Diebold's board of directors and Wincor Nixdorf's supervisory board, Diebold

will launch a voluntary public tender offer for all outstanding shares of

Wincor Nixdorf. The offer consideration will consist of Euros 38.98 in cash

plus 0.434 Diebold shares per Wincor Nixdorf share.

Based on the volume-weighted average share price of Diebold shares over the

last five trading days prior to Oct. 17, 2015, the day on which the companies

confirmed entry into a non-binding term sheet for a proposed business

combination, the total offer consideration represented an implied value of

Euros 52.50 per Wincor Nixdorf share. This implied value represents a premium

of approximately 35 percent over Wincor Nixdorf's closing share price as of

Oct. 16, 2015, and a premium of approximately 42 percent over the

volume-weighted average price per share over the last three months preceding

that date.  The corresponding enterprise value including net debt amounts to

approximately $1.8 billion, or Euros 1.7 billion, under these terms.

Under the business combination agreement, the existing transformation program

at Wincor Nixdorf will be supported by Diebold and will proceed as planned. The

parties have agreed that there will be no material workforce reductions in

Germany beyond this existing program as a result of the transaction.

Furthermore, all labor-related laws and regulations will be respected and

co-determination on the German supervisory board level shall remain unchanged.

Following the completion of the transaction, the combined company plans to

deliver approximately $160 million of annual cost synergies and will target a

non-GAAP operating margin in excess of 9 percent by the end of the third full

year. In addition, the transaction is expected to be accretive to non-GAAP

earnings per share5 in the second year, excluding integration costs.  

The terms of the voluntary public tender offer were subject to thorough

analysis by Wincor Nixdorf's supervisory board and management board as required

by their fiduciary duties. The management board and supervisory board of Wincor

Nixdorf consider the offer consideration proposed by Diebold fair for

shareholders and the overall agreement in the best interest of Wincor Nixdorf,

its shareholders, employees and other stakeholders and therefore intend to

recommend the offer.

Equal Representation on the Executive Committee

Diebold's Mattes, 54, will be CEO of the combined company. Wincor Nixdorf's

Heidloff, 59, will be president.  Christopher C. Chapman, 41, the current

Diebold chief financial officer (CFO), will serve as CFO of the combined

company, and Jurgen Wunram, 57, Wincor Nixdorf CFO, will serve as chief

integration officer and will represent the retail business in the executive

committee. In total, the combined company's executive committee of eight will

be equally represented by business leaders from both Diebold and Wincor

Nixdorf, including the four executives mentioned above.

Following the closing it is anticipated that along with the existing Diebold

board members, three new directors will join the board of the combined company:

Dr. Alexander Dibelius, chairman of the supervisory board of Wincor Nixdorf,

Dr. Dieter Dusedau, member of the supervisory board of Wincor Nixdorf, and

Eckard Heidloff. Also, to facilitate the integration, it is intended that three

Diebold executives will join the supervisory board of Wincor Nixdorf upon

closing.  

Transaction Structure

The transaction will be implemented through a voluntary public tender offer for

all outstanding shares of Wincor Nixdorf. Diebold expects the offer to commence

during the first quarter of 2016 after filing of Diebold's registration

statement on Form S-4 with the U.S. Securities and Exchange Commission and

approval of the offer document by the German Federal Financial Supervisory

Authority (Bundesanstalt fuer Finanzdienstleistungsaufsicht /

BaFin). The offer is subject to certain closing conditions, including

regulatory approvals and a minimum acceptance threshold of c. 67.6 percent of

all existing Wincor Nixdorf ordinary shares (this corresponds, after deduction

of treasury shares held by Wincor Nixdorf which will not be tendered, to c. 75

percent of all current voting stock (outstanding shares)).

Given that the mixed consideration consisting of cash and stock is offered by a

US corporation, Diebold, Inc. does not expect that German withholding tax will

apply to Wincor Nixdorf shareholders who are not tax-resident in Germany

(unless the Wincor Nixdorf shares are held as part of business assets in

Germany).  For Wincor Nixdorf shareholders tax resident in Germany, the tax

treatment of the voluntary public tender offer will follow generally applicable

German tax principles, which may include German taxation of the cash component

of the consideration as a dividend for certain shareholders tax-resident in

Germany.  A general summary of material tax consequences related to the

participation in the voluntary public tender offer will be published as part of

the offer documentation.  For an individual analysis of their personal tax

situation in connection with the acceptance of the voluntary public takeover

offer, Wincor Nixdorf shareholders are advised to consult their tax advisors.

Upon successful completion of the offer and regulatory approvals, Diebold will

consolidate the financial results of Wincor Nixdorf, and Diebold's earnings

will reflect its proportionate share of Wincor Nixdorf's earnings.

Financing the Transaction

Diebold has committed financing in place. In addition to cash on hand, Diebold

expects to raise approximately $2.8 billion to fund the transaction, refinance

existing debt of both companies and provide liquidity. This permanent financing

is expected to be comprised of a $0.5 billion senior secured revolver and $2.3

billion of senior secured term loans and unsecured notes.  

Following the transaction close, the pro forma balance sheet is expected to

have net debt/EBITDA(6) of approximately 4x. The combined company intends to

shift its capital allocation plans to focus on deleveraging the balance sheet

to be consistently below 3x net debt/EBITDA by the end of year three.

Commensurate with this approach and after the transaction closes, the combined

company intends to pay a dividend per share at a rate of approximately

one-third of Diebold's current annual cash dividend per share, subject to

market and other conditions.  Moving forward, paying a dividend remains a part

of the combined company's philosophy of returning value to shareholders.  

Credit Suisse and J.P. Morgan acted as financial advisers to Diebold, along

with Sullivan & Cromwell LLP, who served as legal adviser. J.P. Morgan and

Credit Suisse are also providing committed financing for the transaction.

Goldman Sachs acted as financial adviser to Wincor Nixdorf, along with

Freshfields Bruckhaus Deringer LLP, who served as legal adviser.

Details for Joint Press Call

The companies will jointly present their plans for the business combination on

a media call taking place today at 10:00 a.m. CET (4:00 a.m. EST). The media

call will take place in German. Participants should ask to join the "Diebold

and Wincor Nixdorf Media Call". Details on the call are as follows:

Germany Toll free: 0800 673 7932

US/CAN Toll free: 1 866 966 5335

UK Toll free:  0808 109 0700

Int'l Toll: +44 (0) 20 3003 2666

Diebold Analyst Call Details

Diebold will hold an analyst conference call to present this business

combination during a webcast and conference call today at 8:00 a.m. EST (2:00

p.m. CET). Both the presentation and access to the call are available via

Diebold's website at http://www.diebold.com/DieboldWincor . A replay of the

call will also be available on this website. The conference call will last

approximately one hour. Participants should plan to dial in 10 minutes prior to

the session. Details on the call are as follows:

US/CAN Toll free: 1 877 545 1403

Int'l Toll: +1 719 325 4893

Conference ID:   6742172

Wincor Nixdorf Analyst Call Details

Wincor Nixdorf will hold an analyst conference call to present this business

combination today at 11:30 a.m. EST (5:30 p.m. CET). The dial-in number is as

follows:

Int'l Toll: +49-(0) 69-271340171

Diebold Contacts

Media Relations                             

Mike Jacobsen, APR                          

+1 330 490 3796                             

michael.jacobsen@diebold.com                

Investor Relations

Steve Virostek

+1 330 490 6319

stephen.virostek@diebold.com

Felix Morlock, Brunswick Group (Germany)

+49 69 2400 5510

fmorlock@brunswickgroup.com

Cindy Leggett-Flynn, Brunswick Group (U.S.)

+1 212 333 3810

clf@brunswickgroup.com

Wincor Nixdorf Contacts

Media Relations                     

Andreas Bruck                       

+49 5251 693 5200                  

andreas.bruck@wincor-nixdorf.com    

Investor Relations

Dr. Sabine Brummel

+49 5251 693 5050

sabine.brummel@wincor-nixdorf.com

About Diebold

Diebold, Incorporated (NYSE: DBD) provides the technology, software and

services that connect people around the world with their money - bridging the

physical and digital worlds of cash conveniently, securely and efficiently.

Since its founding in 1859, Diebold has evolved to become a leading provider of

exceptional self-service innovation, security and services to financial,

commercial, retail and other markets.  

Diebold has approximately 16,000 employees worldwide and is headquartered near

Canton, Ohio, USA. Visit Diebold at http;//www.diebold.com or on Twitter:

http://twitter.com/DieboldInc .

About Wincor Nixdorf

Wincor Nixdorf is one of the world's leading providers of IT solutions and

services to retail banks and the retail industry. The main focus of the group's

comprehensive portfolio lies on business process optimization, especially in

the branch operations of both sectors. Wincor Nixdorf has established a

presence in around 130 countries around the globe, giving it an outstanding

profile when it comes to customer proximity. The parent company has

subsidiaries in 42 countries. The company also places great importance on

building close relationships with sales partners that have an excellent

knowledge of the local requirements and conditions on the customer side. Wincor

Nixdorf has a total workforce of around 9,000 people. Over half of those are

based outside Germany.

NOTES

(1) Calculated using fixed exchange ratio and five-day volume weighted average

price of Diebold shares prior to Oct. 17, 2015 announcement that both companies

had signed a non-binding term sheet regarding a potential business combination.

Diebold's five-day volume weighted average price was converted to euros using

an exchange rate of 1.07 U.S. dollars to the euro. Shareholders of Wincor

Nixdorf are advised to consult their tax advisors regarding the tax

consequences in connection with the acceptance of the voluntary public tender

offer.

(2) The exchange rate used to calculate total consideration and transaction

value was 1.07 U.S. dollars to the euro.

(3) Non-GAAP operating margin is the percentage of GAAP operating profit margin

adjusted for restructuring and non-routine items.

(4) Diebold prepares its financial statements in accordance with US GAAP while

Wincor Nixdorf prepares its financial statements in accordance with IFRS.

Revenues are derived from the combined revenues of both companies for the

trailing 12 months, before making adjustments to convert Wincor Nixdorf's

financial results from IFRS to US GAAP. Wincor Nixdorf revenue has been

converted at an exchange rate of 1.09 U.S. dollars to the euro.

(5) Non-GAAP earnings per share is GAAP earnings adjusted for restructuring and

non-routine items compared to the combined company's outstanding shares.

(6) Net debt/EBITDA is defined as long-term debt plus short-term debt minus

cash and cash equivalents divided by earnings before interest, taxes,

depreciation and amortization adjusted for restructuring and other

non-recurring items for the trailing 12 months. This ratio assumes that the

North American Electronic Security business has been divested.

IMPORTANT INFORMATION FOR INVESTORS AND SHAREHOLDERS

In connection with the proposed business combination transaction, Diebold

intends to file a Registration Statement on Form S-4 with the U.S. Securities

and Exchange Commission ("SEC") that will include a prospectus of Diebold to be

used in connection with the offer by Diebold to acquire all outstanding Wincor

Nixdorf shares. When available, Diebold will disseminate the prospectus to

Wincor Nixdorf shareholders in connection with Diebold's offer to acquire all

of the outstanding shares of Wincor Nixdorf. Diebold also intends to file an

offer document with the German Federal Financial Supervisory Authority

(Bundesanstalt fuer Finanzdienstleistungsaufsicht) ("BaFin").

INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROSPECTUS AND THE OFFER

DOCUMENT, AS WELL AS OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC OR BAFIN

OR PUBLISHED AT DIEBOLD'S WEBSITE AT WWW.DIEBOLD.COM UNDER THE INVESTOR

RELATIONS SECTION, REGARDING THE PROPOSED BUSINESS COMBINATION TRANSACTION AND

THE OFFER BECAUSE THESE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION.

You will be able to obtain a free copy of the prospectus and other related

documents filed by Diebold with the SEC on the SEC's website at www.sec.gov.

The prospectus and other documents relating thereto may also be obtained for

free by accessing Diebold's website at www.diebold.com under the Investor

Relations section. Following approval by BaFin, you may obtain a free copy of

the offer document on BaFin's website at www.bafin.de, and, along with an

English translation thereof, at Diebold's website at www.diebold.com under the

Investor Relations section. Further you may obtain a copy of the offer document

from Deutsche Bank Aktiengesellschaft, Taunusanlage 12, 60325 Frankfurt am

Main, Germany, for distribution free of charge (also available from Deutsche

Bank Aktiengesellschaft via e-mail to dct.tender offers@db.com or by telefax to

+49 69 910 38794). In addition an English language press release and its German

language translation will be published via an electronically operated

information distribution system in the United States.

This document is neither an offer to purchase nor a solicitation of an offer to

sell shares of Wincor Nixdorf or Diebold. Final terms and further provisions

regarding the public offer will be disclosed in the offer document after the

publication has been approved by BaFin and in documents that will be filed with

the SEC. Investors and holders of Wincor Nixdorf shares, or of such instruments

conferring a right to directly or indirectly acquire Wincor Nixdorf shares, are

strongly encouraged to read the offer document and all documents in connection

with the public offer as soon as they are published because these documents

will contain important information.

No offering of securities will be made except by means of a prospectus meeting

the requirements of Section 10 of the U.S. Securities Act of 1933, as amended,

and applicable European regulations, including the German Securities

Acquisition and Takeover Act (Wertpapiererwerbs- und ubernahmegesetz) and the

German Securities Prospectus Act (Wertpapierprospektgesetz). Subject to certain

exceptions to be approved by the relevant regulators or certain facts to be

ascertained, the public offer would not be made directly or indirectly, in or

into any jurisdiction where to do so would constitute a violation of the laws

of such jurisdiction, or by use of the mails or by any means or instrumentality

(including without limitation, facsimile transmission, telephone and the

internet) of interstate or foreign commerce, or any facility of a national

securities exchange, of any such jurisdiction.

CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS

Certain statements contained in this communication regarding matters that are

not historical facts are forward-looking statements (as defined in the Private

Securities Litigation Reform Act of 1995). These include statements regarding

management's intentions, plans, beliefs, expectations or forecasts for the

future including, without limitation, the proposed business combination with

Wincor Nixdorf and the offer. Such forward-looking statements are based on the

current expectations of Diebold and involve risks and uncertainties;

consequently, actual results may differ materially from those expressed or

implied in the statements. Such forward-looking statements may include

statements about the business combination and the offer, the likelihood that

such transaction is consummated and the effects of any transaction on the

businesses and financial conditions of Diebold or Wincor Nixdorf, including

synergies, pro forma revenue, targeted operating margin, net debt to EBITDA

ratios, accretion to earnings and other financial or operating measures. By

their nature, forward-looking statements involve risks and uncertainties

because they relate to events and depend on circumstances that may or may not

occur in the future. Forward-looking statements are not guarantees of future

performance and actual results of operations, financial condition and

liquidity, and the development of the industries in which Diebold and Wincor

Nixdorf operate may differ materially from those made in or suggested by the

forward-looking statements contained in this document. In addition, risks and

uncertainties related to the contemplated business combination between Diebold

and Wincor Nixdorf include, but are not limited to, the expected timing and

likelihood of the completion of the contemplated business combination,

including the timing, receipt and terms and conditions of any required

governmental and regulatory approvals of the contemplated business combination

that could reduce anticipated benefits or cause the parties not to consummate,

or to abandon the transaction, the ability to successfully integrate the

businesses, the occurrence of any event, change or other circumstances that

could give rise to the termination of the business combination agreement or the

contemplated offer, the risk that the parties may not be willing or able to

satisfy the conditions to the contemplated business combination or the

contemplated offer in a timely manner or at all, risks related to disruption of

management time from ongoing business operations due to the contemplated

business combination, the risk that any announcements relating to the

contemplated business combination could have adverse effects on the market

price of Diebold's common shares, and the risk that the contemplated

transaction or the potential announcement of such transaction could have an

adverse effect on the ability of Diebold to retain and hire key personnel and

maintain relationships with its suppliers, and on its operating results and

businesses generally. These risks, as well as other risks associated with the

contemplated business combination, are more fully discussed in a prospectus

that will be included in the Registration Statement on Form S-4 that will be

filed with the SEC in connection with the contemplated business combination and

the offer. Additional risks and uncertainties are identified and discussed in

Diebold's reports filed with the SEC and available at the SEC's website at

www.sec.gov. Any forward looking statements speak only as at the date of this

document. Except as required by applicable law, neither Diebold nor Wincor

Nixdorf undertakes any obligation to update or revise publicly any

forward-looking statement, whether as a result of new information, future

events or otherwise.

This communication outlines certain key German tax principles related to the

participation in the voluntary public tender offer that may be or may become

relevant to holders of shares of Wincor Nixdorf.  The discussion of German tax

considerations is of a general nature only and does not constitute a

comprehensive or definitive explanation of all possible aspects of German

taxation that may be relevant for shareholders of Wincor Nixdorf.  Furthermore,

this communication does not address non-German tax considerations that may

apply to a shareholder that is a tax resident of a jurisdiction other than

Germany.  This press release is based upon domestic German tax laws in effect

as of the date hereof.  It is important to note that the legal situation may

change, possibly with retroactive effect, and that no assurance can be given

regarding the tax treatment of this transaction by fiscal authorities and the

courts.

SOURCE: Diebold, Incorporated