Cardtronics Acquiring Access to Money

Combined company will operate 52,250 ATMs, including The Pantry's

Published in CSP Daily News

HOUSTON & CHERRY HILL, N.J. -- Cardtronics Inc. appears to be in acquisition mode. In its second deal this month, Cardtronics said that it has entered into an agreement under which Cardtronics USA Inc., a wholly owned subsidiary of Cardtronics Inc., will acquire Access to Money. The combination expands Cardtronics' portfolio of merchant relationships to include The Pantry's Kangaroo Express convenience stores.

As part of a long-term contract announced in 2010, Access to Money operates approximately 1,400 ATMs throughout 11 southeastern states for Cary, N.C.-based [image-nocss] The Pantry.

Under the terms of the deal, Cardtronics will acquire all of the outstanding shares of Cherry Hill, N.J.-based Access to Money for a cash payment of 28.5 cents per share and retire all of Access to Money's outstanding indebtedness. The total cost to be paid at closing will be approximately $21.2 million.

The companies expect an early fourth-quarter completion date for the transaction. Access to Money provides ATM services to merchants and financial institutions, currently operating approximately 10,350 ATMs in the United States.

Cardtronics is the world's largest retail ATM services provider, operating more than 41,900 ATMs around the globe. Access to Money has established itself as a leading operator of merchant-owned ATMs, having secured ATM services contracts for approximately 9,700 ATMs with local and regional merchants, as well as operating nearly 650 ATMs that are company-owned across the United States.

Complementing Cardtronics' existing merchant-owned ATM operations, the combined company, including Access to Money's book of business, will operate nearly 18,000 merchant-owned ATMs, with customers ranging from single-store owners to well-known chain retailers. In total, the combined company will operate approximately 52,250 ATMs--encompassing both company- and merchant-owned machines.

As an authorized ATM services provider, Access to Money also provides ATM services at nearly 500 of the QSR franchisor's U.S. locations, with the opportunity to expand further into its extensive network of franchisees. Additionally, Access to Money brings to the proposed merger a growing ATM services business focused on community banks and credit unions.

"Cardtronics' building and owning a proprietary ATM transaction processing infrastructure has helped unlock economies of scale on the company-owned ATM side of our business for a number of years now. The Access to Money acquisition not only offers the opportunity to extend our reach with leading retail brands, including Kangaroo Express, but it also allows us to bring a new level of scale to our merchant-owned business," said Steve Rathgaber, CEO of Cardtronics.

Up to an additional $5.25 million of consideration may be made to a subordinated lender of Access to Money, contingent upon the achievement of certain future performance thresholds that have been established for the acquired operations. In connection, Access to Money's total outstanding indebtedness of $22.8 million will be considered retired in full as of the closing date.

Cardtronics said that it will fund the acquisition with its operating cash flow and its existing bank revolving line of credit.

Earlier this month, Cardtronics announced that Cardtronics USA acquired LocatorSearch LLC, a provider of location search technology deployed by financial institutions to help customers and members find the nearest, most appropriate and convenient location based on the service they seek ( click here for previous CSP Daily News coverage).

Houston-based Cardtronics operates ATMs in the United States, the United Kingdom, Mexico, and the Caribbean, primarily with retailers such as 7-Eleven, Chevron, Costco, CVS/pharmacy, ExxonMobil, Hess, Rite Aid, Safeway, Target and Walgreens. It also assists in the operation of approximately 4,500 ATMs under managed services contracts with customers such as Kroger, Travelex and Circle K. In addition to its retail ATM operations, the company provides services to large and small banks, credit unions and prepaid card issuers, allowing them to place their brands on 14,900 Cardtronics' ATMs and providing surcharge-free access through Cardtronics' Allpoint Network.