In Buying Access to Money, Cardtronics Will Get Access to 10,350 More ATMs

Capping a wave of recent acquisitions, non-bank ATM network owner and manager Cardtronics Inc. announced late Monday that it had struck a definitive agreement to buy Access to Money Inc., a retail ATM network operator with 10,350 U.S. machines under management.

Houston-based Cardtronics will pay $21.2 million in cash under terms of the deal that includes retirement of Access to Money’s debts. The companies expect the deal, which needs approval from Cherry Hill, N.J.-based Access to Money’s shareholders, to close early in the fourth quarter. Asked how the deal came together, a Cardtronics spokesperson said the companies would not comment beyond Monday’s news release under after the shareholder vote.

Cardtronics serviced an average of 37,505 transacting ATMs in the U.S., Mexico, and the United Kingdom in the second quarter, according to its latest earnings report. As of June 30, Cardtronics in the U.S. owned 19,063 ATMs, operated another 8,215 merchant-owned machines, and provided managed services to another 4,114.

Access to Money, formerly known as TRM Corp., has struggled financially in recent years, having lost $845,000 in 2011’s first half, $1.31 million in 2010, and $6.62 million in 2009. But it does bring to Cardtronics some valuable merchant relationships, including operation of 1,400 ATMs in 11 Southeastern states for The Pantry, the nation’s No. 3 convenience-store chain whose primary banner is Kangaroo Express. Plus, Access to Money has ATMs at nearly 500 Dunkin’ Donuts locations under a contract that gives the company expansion rights with Dunkin’ Donuts franchisees. The company also has been growing its ATM services for banks and credit unions.

Cardtronics, which has built its own processing platform, has machines in locations of such major retailers as 7-Eleven, Costco, CVS/pharmacy, Target, Walgreens, and major gasoline retailers such as ExxonMobil and Chevron. Managed-services partners include The Kroger Co., the nation’s top traditional grocery-store chain. The company also has branding deals with eight of the 15 largest U.S. banks by assets, and operates the Allpoint surcharge-free ATM network.

“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,” Cardtronics chief executive Steve Rathgaber said in a statement. “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.”

Access to Money’s U.S. network consists of 9,700 ATMs owned by local and regional merchants and 650 company-owned machines. Once the deal is completed, Cardtronics will operate 52,250 ATMs, including nearly 18,000 merchant-owned machines.

The pending deal follows several other recent Cardtronics acquisitions or business expansions. In July, Cardtronics closed on its $145 million acquisition of EDC ATM Subsidiary LLC and Efmark Deployment 1 Inc., collectively known as EDC. That deal brought 3,700 retail ATMs and some new bank-branding relationships under Cardtronics’ umbrella.

On Aug. 8, Cardtronics announced an expanded services agreement with Kroger that added 350 machines to its retail footprint. Cardtronics now manages more than 1,150 ATMs in Kroger grocery and convenience-store chains in 32 states.

Also this month, Cardtronics bought LocatorSearch LLC, a New York City-based software provider that develops ATM location applications for the Web and smart phones. The deal, whose terms were not disclosed, included LocatorSearch’s 400 contractual relationships with banks, credit unions, and channel partners as well as its technology. Cardtronics and Allpoint had been using LocatorSearch since 2006.

Under financial terms of the Access to Money deal, Cardtronics will pay 28.5 cents per share, for total cash consideration of $21.2 million. Cardtronics could pay up to another $5.25 million to a subordinated lender to Access to Money contingent on performance thresholds. Access to Money’s total outstanding debts of $22.8 million will be considered retired when the deal closes.