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Big ambition

Fresh from a buyout by KKR, Siemens Nixdorf is itching to move up the ATM food chain. Its goal: to be number one by 2003.by Ann All, editor

December 26, 1999

Jeff Soisson knows that Kohlberg, Kravis, Roberts & Co. L.P., the new owners of Siemens Nixdorf, expect a strong return on their $800 million investment. Soisson, vice president of marketing for Siemens Nixdorf Retail and Banking LLC, is confident his company can deliver, based on three things. "We have a tremendous brand name, excellent products and the opportunity to create pulls for service offerings around the hardware we provide," he said. In fact, Siemens Nixdorf -- soon to be renamed Wincor Nixdorf -- has set a lofty goal for itself. Soisson said the company wants to become the world's number-one ATM manufacturer by 2003. A daunting task, considering the huge installed base of competitors like NCR and Diebold in North America. Siemens Nixdorf is currently number four, behind NCR, Diebold and Fujitsu. Its strongest market is Europe, where the company is the second-largest supplier of ATMs, according to Retail Banking Research Ltd. Yet with approximately 12 percent of the European market, Siemens Nixdorf lags far behind NCR's 48 percent market share. The company has a presence in 21 countries, including emerging areas like China and Eastern Europe. It has alliances with Unisys in South America and with IBM in Canada. Like most ATM manufacturers, Siemens Nixdorf is trying to pinpoint which parts of the world are ready for expansion. "We're looking at different areas and trying to determine what makes the most sense as we attempt to enter some of these markets," Soisson said. Soisson believes that a shift toward new technology in ATMs, including Internet-enabled terminals, is bound to benefit his company. "We think it will definitely play a factor in leveling the playing field," he said. "When we get into the Internet, we're not just talking about a box anymore. We're talking about implications and applications on the network and on the host. Financial institutions are going to want to find a partner that they're comfortable working with in all of those areas." Siemens Nixdorf's high-tech reputation may also find a friendly audience among some independent deployers, who are interested in applications like video advertising and couponing. The company bills its ProCash Compact as the first Windows NT-based cash dispenser. Among its advertising-friendly features: a Pentium processor, VGA monitor and up to four cassettes. "I think that large players like us, and NCR and Diebold, will be the ones people turn to as they begin to identify how their ATM strategy is going to converge with their overall electronic commerce strategy," Soisson said. One of Siemens Nixdorf's key growth strategies will be the aforementioned "service offerings," applications and services packaged around its hardware. Opining that customers are seeking "solutions" from IT companies like his, Soisson said, "The solution features several components -- not just hardware and software but implementation, from project management to installation to ongoing support." Soisson predicted "aggressive growth" in the company's professional services area in the next 12 to 24 months. "Value creation is the key," he said. KKR will own the majority of the company, renamed Wincor Nixdorf. Its partner in the deal is G.S. Capital Partners III, L.P., a private equity investment fund that is affiliated with Goldman, Sachs & Co. Ned Gilhuly, KKR's managing director in London, lauded Siemens Nixdorf's "excellent management" and "attractive growth prospects." He said, "We look forward to working with (management) to grow this business on an international scale." KKR has previously invested in retail and banking companies such as Safeway and Fleet Financial Group.

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