Cardtronics to acquire Direct Cash Payments
03 October 2016 | 3723 views | 0
Cardtronics plc (CATM) and DirectCash Payments Inc. ("DCPayments") today announced a definitive agreement under which Cardtronics would acquire DCPayments. The purchase price of CAD$19.00 per share includes the assets of First Data Corporation's Australian retail ATM and managed services ATM portfolio ("First Data ATM portfolio"), which was acquired by DCPayments on September 30.
DCPayments is a leading global ATM services provider with approximately 25,000 ATMs (inclusive of its First Data ATM portfolio acquisition) with primary operations in Australia, Canada and the United Kingdom. The combination will leverage Cardtronics' existing infrastructure and relationships, and drive substantial operating synergies. The combined companies would serve approximately 225,000 ATMs in North America, Europe and Asia-Pacific.
Cardtronics Chief Executive Officer Steve Rathgaber commented:
"Our proposed combination with DCPayments will enhance our global presence by adding Australia as an anchor market in Asia-Pacific, in addition to New Zealand. It also would grow Cardtronics' existing ATM estates in Canada, the United Kingdom and Mexico. The combination will further position us to be the preferred global provider of ATM solutions to retailers and financial institutions. This acquisition would broaden our exposure to helping financial institutions reevaluate their physical presence as part of the bank transformation trends we are seeing worldwide."
Expansion into Asia-Pacific
The acquisition of DCPayments would establish Australia as a new platform for growth, alongside Cardtronics' existing presence in North America and Europe. DCPayments is a leading independent ATM operator in Australia, with approximately 11,000 ATMs owned or managed, inclusive of its recent First Data ATM portfolio acquisition.
Enhanced Scale and Capabilities in Canada
This combination would result in Cardtronics managing more than 11,000 ATMs in Canada, a leadership position in the independent ATM market that would also create opportunities to service additional Canadian financial institutions to add convenient points of presence to their ATM networks.
United Kingdom Expansion
DCPayments would add more than 5,700 ATMs to the company's existing footprint in the United Kingdom, providing an opportunity to deliver Cardtronics' service level excellence and cost efficiency to these additional ATMs.
DCPayments President & Chief Executive Officer Jeffrey J. Smith commented:
"The combination of DCPayments and Cardtronics creates a unique platform that is ideally suited to maximize customer value for both organizations. There is a tremendous fit between our two organizations, and I am confident that the combined businesses will perform at even higher levels for customers and employees."
Cardtronics Chief Executive Officer Steve Rathgaber added:
"The acquisition of DCPayments marks a significant milestone for Cardtronics, taking us into Asia-Pacific and growing our presence in existing geographies. Combining these two strong businesses will offer exceptional opportunities for everyone that we serve - customers, employees, partners and shareholders. I am particularly excited about the implications for our customers, who will benefit from our expanded global footprint as well as our combined expertise, talent and capabilities."
Under the terms of the agreement, Cardtronics will acquire all of the outstanding equity of DCPayments for CAD$19.00 per share in cash, representing a transaction value of approximately $460 million in U.S. dollars, including approximately $47 million of debt incurred by DCPayments to finance its purchase of the First Data Australian ATM portfolio on September 30, 2016. The First Data Australian ATM portfolio acquisition is expected to contribute more than $10 million of annual Adjusted EBITDA. Cardtronics intends to fund the DCPayments acquisition with cash on hand as well as fully committed debt financing. Cardtronics has received commitments from banks to expand the size of its credit facility upon the completion of the transaction. Subject to satisfaction of certain closing conditions, including the approval of DCPayments' shareholders and court approval as required by applicable law, the transaction is expected to close early in the first quarter of 2017. After closing, we expect the acquisition to be accretive to non-GAAP adjusted net income per share. After completion of the transaction, the financial impact will be reflected in our fiscal 2017 guidance, expected to be issued in the first quarter of 2017.