23 November 2014

Cardtronics scores Co-op Food ATM operating deal

02 September 2014  |  1551 views  |  0 Source: Cardtronics

Cardtronics (CATM) today announced that its U.K.-based business is entering into a seven-year, exclusive agreement to operate approximately 1,800 ATMs located in Co-operative Food ("Co-op Food") stores across the U.K. Cardtronics will take on the operation of the ATMs no later than January 2016, upon expiration of the existing ATM contract.

In addition, beginning immediately, Cardtronics will have the right to install and operate ATMs in hundreds of Co-op Food locations that do not currently have an ATM, as well as in any new Co-op Food Store.

Cardtronics will also acquire ownership of Sunwin Services Group ("SSG"), a subsidiary of the Co-operative Group. SSG's primary business is providing secure cash logistics and ATM maintenance to the Co-op Food ATM estate. SSG also provides these services and manned guarding services to other Co-op Group entities, as well as external customers, such as Cardtronics, which has been a customer of SSG for secure cash logistics services for a number of years. Combining SSG with Cardtronics' existing internal secure cash logistics and ATM maintenance capabilities will strengthen Cardtronics' integrated ATM services model and bring more complete geographic coverage in the U.K.

Co-op Food is a division of the Co-op Group, and is one of the largest grocery retailers in the U.K. with a food store in every U.K. postal area. Co-op Food's selection of Cardtronics as its ATM provider is a significant deal for Cardtronics in continuing its expansion in the important U.K. food retailing sector.

Cardtronics Chief Executive Officer Steve Rathgaber said: "We believe this deal delivers great value for all of our stakeholders. We have a strong track record of working with major retailers in the U.K. and the agreement to operate the existing Co-op Food stores' 1,800-strong ATM estate will significantly expand our core U.K. business. Since the acquisition of Cardpoint Services last year, our U.K. business has been growing impressively and this transaction adds to our solid base for continued profit growth in the U.K., with notable increases in revenue expected in 2015 and increasing in 2016 as we begin operating the existing ATMs."

Cardtronics Europe Managing Director Jonathan Simpson-Dent said: "The Co-op Food stores' ATM estate is a high-quality portfolio and is one of the highest transacting off-branch estates in the U.K. market. As such, it presents a solid, strategic opportunity for growth that plays absolutely to our core strengths. In addition, acquiring ownership of SSG will ensure that we can provide best-in-class support to our expanding core ATM business and offer consumers increased access to cash and a high level of service across our ATM fleet."

Transaction Details

Purchase consideration of approximately [Pounds]35 million will be paid to the Co-op Group in stages upon the passage of time and fulfilment of certain performance conditions. Acceleration in timing of the transfer of the Co-op Food ATM estate to Cardtronics could result in an additional [Pounds]6.5 million in consideration being paid to Co-op Group. Cardtronics will acquire ownership of SSG upon the close of this transaction, which is expected to occur in November 2014. The agreement for Cardtronics to operate the Co-op Food ATM estate will also be effective as of the close of this transaction, but the operation of the ATMs will not commence until January 2016, after Co-op Food's existing ATM contract expires. Based upon the timing of the completion of the acquisition and the Company's assumption of the existing network of ATMs under contract, the Company expects the acquisition and the ATM contract to be neutral to Adjusted Earnings per Share in 2015 and accretive to Adjusted Earnings per Share in 2016. 

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Related blogs

Create a blog about this story (membership required)

Related company news

 

Featured job

Competitive
New York City, NY (USA)

Find your next job