Cardtronics Inc. (CATM) has completed the takeover of U.S.-based Welch ATM, as part of its attempt to enhance inorganic growth. The all-cash deal worth $160 million was announced in July this year.
The acquisition has brought together two premier retail ATM service providers with complementary customer bases and sales capabilities. Hence, the merger is likely to result in higher revenues and a stronger market position for Cardtronics.
The deal will also help the company achieve cost synergies and add value to its customer services, thereby improving business experience for both of its retailers and institutional clients. These factors should further improve financials and enhance shareholder value.
Post acquisition, Welch ATM founder and CEO, Hewitt has joined the leadership team at Cardtronics as executive vice president, Financial Institution and Retail Sales and Relationship Management.
Acquisition Results
The combined entity – Cardtronics and Welch ATM – now has a diversified portfolio of 111,150 ATMs globally, which includes 93,350 retail ATMs located in the U.S.
By 2015, Cardtronics is expected to generate revenues of $70 million with the help of Welch’s 7,350 company-owned ATMs and 19,000 merchant-owned ATMs.
While the acquisition creates Walgreens Co.’s (WAG) consolidated portfolio of 5,100 ATMs, Welch ATM adds 3,100 company-owned Rite Aid Corporation (RAD) located ATMs to Cardtronics’ chain, thereby boosting its nationwide presence.
Moreover, Welch ATM adds Kahuna ATM Solutions, an ATM solutions provider for independent sales organizations to Cardtronics.
Cardtronics and Welch ATM together will now offer extensive services to a wider customer base, improve operational efficiencies and provide ATM services across all market segments. Cardtronics will update the contribution from this acquisition in its third-quarter earnings, slated to release by the end of this month.
However, the market did not seem to respond well to the news, as the stock price fell 3.1% in the trading sessions post announcement.
Zacks Rank
Cardtronics currently holds a Zacks Rank #4 (Sell). Investors interested in the same industry space could consider stocks like ExamWorks Group, Inc. (EXAM), which has a Zacks Rank #2 (Buy).
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