HOUSTON-- Cardtronics Inc. has announced that its wholly owned subsidiary, Cardtronics USA Inc., has entered into a definitive agreement under which it will acquire EDC ATM Subsidiary LLC and Efmark Deployment I Inc. (EDC). Under the terms of the agreement, and upon closing, Cardtronics will pay $145 million, plus or minus an adjustment for working capital as of the closing date.
Cardtronics expects this transaction to be accretive to adjusted net income per share in 2011 and increasingly accretive in future years as synergies are fully realized.
Upon closing of the [image-nocss] transaction, Houston-based Cardtronics will acquire all ownership interests in EDC's ATM business, including approximately 3,700 ATMs, as well as numerous ATM placement agreements with high-traffic U.S. retailers and ATM branding contracts with some of America's largest financial institutions. EDC operates nationwide with an ATM placement portfolio focused on multi-state retail operators and high transacting merchant locations, such as convenience stores.
In the event of successfully closing this acquisition, Cardtronics would reinforce and enhance its status as creator and caretaker of a value-based community populated by merchants, financial institutions and consumers. Among the expected post-acquisition closing benefits to Cardtronics' network of relationships, EDC's ATM placements would significantly enhance Cardtronics' footprint in the Midwest and Great Lakes regions--in effect, doubling its owned ATM placements in multiple states.
Additionally, upon completion of the acquisition, Cardtronics will have ATM branding relationships with eight of the 15 largest U.S. banks (by assets). Upon closing, it will have 23,500 Cardtronics-owned U.S. ATMs; 14,700 branded U.S. ATMs; and more than 41,000 owned and managed/operated ATMs worldwide.
"EDC has built a tremendous network of retail ATM placements and financial institution branding partnerships," said Steve Rathgaber, CEO of Cardtronics. "This acquisition would enhance Cardtronics' reach in more geographic regions across the U.S. and would expand our relationships in the important convenience store market. Cardtronics remains the most proven and trusted ATM provider in both the financial services and retailer worlds."
Cardtronics intends to finance the acquisition primarily through its revolving credit facility, which was recently expanded from $175 million to $220 million. The transaction is expected to be accretive to adjusted net income per share in 2011 and increasingly accretive in future years. EDC generated approximately $56 million of revenue in the 12 months ended March 31, 2011, which does not fully reflect the impact of certain new retail and financial institution relationships initiated during the period. Upon closing, Cardtronics expects to update 2011 earnings guidance.
The final completion of the acquisition is subject to various conditions including customary regulatory approvals, which Cardtronics expects to occur during its third quarter.
Headquartered in Walnut Creek, Calif. and a subsidiary of EDC Holding Co. LLC, EDC ATM LLC has approximately 3,700 turnkey ATMs and self-service financial kiosks in its nationwide network. EDC operates nationwide, processing millions of transactions each month. The company provides financial services programs for large retailers, financial institutions and independent merchants.
Cardtronics is the world's largest nonbank owner of ATMs. The company operates more than 33,200 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. Cardtronics also assists in the operation of approximately 4,000 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 more than 12,000 Cardtronics' ATMs and providing surcharge-free access through Cardtronics' Allpoint Network.
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