The broader technology sector appears to be buzzing with new mergers and acquisitions taking place almost every day. Recently, NCR Corporation NCR received joint acquisition offers from private equity firms.

According to Reuters, the first to report the news, the world’s two largest private equity firms, The Blackstone Group LP BX and The Carlyle Group LP CG have made a joint offer to NCR worth over $10 billion in a leveraged buyout including debt.

Leverage buyouts or LBOs represent a specific type of investment strategy that involves buying entire companies with heaps of debt. LBOs occur when management works with private equity or other partners to buy all of the stock of a company with the hopes that managing it privately will result in higher profitability.

Reuters stated that Apollo Global Management LLC APO and Thoma Bravo LLC have also joined the bidding. So it won’t be a surprise if another group of equity firms team up to compete, per the financial news and data provider.

Following the report, NCR shares surged to a new 52-week high before closing at $34.73, representing an approximate day’s gain of 11%.

Founded more than a century ago in 1884, NCR invented the cash register, and manufactures ATM machines and checkout equipment. However, over the past few years, management has been criticized by shareholders for the decelerating performance of the company and late entry into cloud solutions.

The company’s revenues in the recently-reported first quarter declined 2.8%, while adjusted earnings per share fell 14%. The company admitted that most of its customers, mainly retailers, have been shifting away from costlier PC systems toward cloud-based checkout systems to reduce spending and enhance consumer shopping experiences. The company still has a lot to do to shift from being a hardware company to software and services provider.

Therefore, shareholders have been putting pressure on management to look for other strategic alternatives. It is to be noted that over one-third of the shares are held by hedge funds, including Jana Partners and activist Marcato Capital Management.

In April this year, The Wall Street Journal reported that shareholder pressure was forcing the company to look for options including a spin-off or asset sale, returning cash to investors through dividends or share buybacks, and even selling the company in its entirety.

Since then, NCR has become a potential takeover target. However, it does not seem that the buyout of NCR would happen any time soon.

According to Bloomberg, the parties are unable to agree on the price. NCR’s bankers have demanded $36 a share which, according to the two private equity firms, is too high since the company is highly leveraged and generating minimal cash flows. The company had a long-term debt of $3.44 billion (debt to capitalization ratio of 64.5%) at the end of first-quarter 2015 and generated free cash flow of only $24 million during the quarter.

Though currently it seems that NCR is demanding too high a price, but looking at the number of interested parties a bidding war may benefit the company in getting the desired value.

Currently, NCR carries a Zacks Rank #3 (Hold).

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