PAR Technology Corporation Announces Sale of Wholly Owned Subsidiaries PAR Government Systems Corporation and Rome Research Corporation

Rhea-AI Summary

PAR Technology (NYSE: PAR), a global restaurant technology firm, announced the sale of its Government operating segment, consisting of PAR Government Systems (PGSC) and Rome Research (RRC), for a total of $102 million.

The sale of PGSC to Booz Allen Hamilton (NYSE: BAH) was finalized on June 7, 2024, while RRC is expected to be sold to NexTech Solutions Holdings by the end of Q2, 2024. This divestiture aligns with PAR's strategic aim to focus on becoming the foremost technology provider to enterprise foodservice.

CEO Savneet Singh emphasized that the move will allow PAR to reinvest in areas offering the highest returns, enhancing their primary business.

Positive

• Sale of Government segment for $102 million.
• Divestiture completed for PGSC with Booz Allen Hamilton on June 7, 2024.
• Planned sale of RRC to NexTech Solutions by end of Q2, 2024.
• Strategic focus shift towards enterprise foodservice technology.
• Capital reinvestment aimed at higher returns.

Negative

• Potential short-term revenue loss from divested Government segment.
• Future financial performance may depend heavily on the success of reinvestment in core business.
• Uncertainty regarding the seamless transition and continued success of divested subsidiaries.

Insights

Financial Analyst

The sale of PAR Technology Corporation's government segment, including the subsidiaries PAR Government Systems Corporation (PGSC) and Rome Research Corporation (RRC), for $102 million represents a significant strategic shift. By divesting non-core assets, the company is likely focusing on its core business in the foodservice technology sector, which may lead to enhanced operational efficiency and capital allocation.

For retail investors, this move signals a more streamlined business model and potentially improved financial health. The capital generated from this sale could be reinvested into higher-margin areas within their primary sector, potentially increasing profitability and shareholder value in the long term. However, investors should also consider the potential risks associated with narrowing the company's focus, as it may expose them to sector-specific risks.

To put it simply, if PAR Technology can effectively deploy the proceeds from this sale into growth initiatives within their core operations, it could lead to increased earnings and potentially higher stock valuations over time. However, investors should keep an eye on how the company utilizes these funds and whether they can generate the expected returns on investment.

Market Research Analyst

This divestiture aligns with a common trend in the technology sector where companies streamline their operations to focus on core competencies. By selling to well-established firms like Booz Allen Hamilton and NexTech Solutions, PAR Technology ensures that its government segment will continue under competent management, providing a clearer path for its own focus on foodservice technology.

For stakeholders, the transaction not only frees up capital but also reduces operational complexity, allowing the company to dedicate more resources towards innovation and competitiveness in the restaurant technology space. This strategic focus can attract new clients and enhance existing customer relationships, fostering long-term growth.

Overall, the move appears to be a well-considered strategy to enhance specialization and market presence in the foodservice technology sector, supporting both immediate financial performance and long-term business sustainability.

NEW HARTFORD, N.Y.--(BUSINESS WIRE)-- PAR Technology Corporation (NYSE: PAR), a global restaurant technology company providing unified commerce solutions for enterprise foodservice announced today that it has agreed to the sale of its Government operating segment via the sale of its wholly owned subsidiaries: PAR Government Systems Corporation (PGSC) and Rome Research Corporation (RRC) for a combined total of $102 million.

PAR announced it has completed the sale of 100% of the issued and outstanding equity interests of PGSC to Booz Allen Hamilton Inc. (NYSE: BAH) in a simultaneous sign and close of the transaction on June 7, 2024.

PAR has also entered into a definitive acquisition agreement to sell RRC to NexTech Solutions Holdings, LLC (NTS). Pursuant to the definitive acquisition agreement, NTS will acquire 100% of the issued and outstanding equity interests of RRC with an expected close by the end of Q2, 2024.

“Today’s announcement represents a milestone in advancing PAR’s goal to become the world’s largest technology provider to enterprise foodservice,” commented Savneet Singh, PAR Technology’s Chief Executive Officer. “The sale of our Government operating segment to notable strategic buyers, Booz Allen Hamilton and NexTech Solutions provides a clear fit for these businesses, allows for a seamless transition and sets up both PGSC and RRC for continued success.”

Mr. Singh continued, “The divestiture is part of our efforts to divest non-core assets and reinvest capital where it will receive the highest return.”

Baird and Gibson, Dunn & Crutcher LLP advised PAR Technology Corporation. Jefferies LLC and King & Spalding LLP advised Booz Allen.

ABOUT PAR TECHNOLOGY

For more than 40 years, PAR Technology’s (NYSE: PAR) cutting-edge products and services have helped bold and passionate restaurant brands build lasting guest relationships. We are the partner enterprise restaurants rely on when they need to serve amazing moments from open to close, during the most hectic rush hours, and when the world forces them to adapt and overcome. More than 95,000 restaurants in more than 110 countries use PAR’s restaurant hardware, software, loyalty, drive-thru, and back-office solutions. To learn more, visit www.partech.com or connect with us on LinkedIn, Twitter, Facebook, and Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240610850484/en/

Christopher R. Byrnes (315) 743-8376

cbyrnes@partech.com, www.partech.com

Source: PAR Technology Corporation

FAQ

What is the total value of the sale of PAR Technology's Government segment?

The total value of the sale is $102 million.

Which companies are acquiring PAR Technology's Government subsidiaries?

Booz Allen Hamilton is acquiring PAR Government Systems and NexTech Solutions Holdings is acquiring Rome Research

When was the sale of PAR Government Systems completed?

The sale was completed on June 7, 2024.

When is the sale of Rome Research expected to close?

The sale is expected to close by the end of Q2, 2024.

What is the strategic significance of this sale for PAR Technology?

The sale allows PAR Technology to focus on becoming the leading technology provider for enterprise foodservice and to reinvest capital for higher returns.

How does the sale affect PAR Technology's business strategy?

The sale aligns with PAR Technology's strategy to divest non-core assets and focus on their core business in enterprise foodservice technology.