Cardtronics, Inc. announced that in connection with its previously announced exclusive ATM operating agreement with Co-operative Food (“Co-op Food”) in the United Kingdom, the migration of the approximately 1,900 high-transacting ATMs will commence in late 2014 instead of in January 2016, as previously contemplated. The migration will continue over the course of 2015. Co-op Food is a division of the Co-operative Group and one of the largest grocery retailers in the U.K., with a food store in every postal area.
As announced on September 2, 2014, Cardtronics entered into an exclusive ATM services agreement to operate the existing Co-op Food ATM estate through 2022. The ATM count has been updated to approximately 1,900 from the previously announced 1,800. The agreement also gives Cardtronics rights to install and operate ATMs at hundreds of Co-op Food locations that do not currently have an ATM. As part of the same announcement, Cardtronics entered into an agreement to acquire Sunwin Services Group (“SSG”), a subsidiary of the Co-operative Group that provides secure cash logistics and ATM maintenance to the Co-op Food ATM estate and other customers, as well as manned guarding services. This acquisition of SSG closed on November 3, 2014.
The Co-op Food ATMs, both new and existing, once migrated to Cardtronics, will remain free-to-use and be jointly branded ‘Co-op Food’ and ‘Cashzone,’ the consumer-facing brand of Cardtronics U.K.
The base purchase consideration amount remains £35 million, as previously announced. In consideration of the earlier start of the ATM operating agreement, Cardtronics will pay an additional £6.5 million to the Co-operative Group. Cardtronics will also pay £6.4 million to Co-operative Bank to acquire the existing ATM equipment at Co-op Food stores. Comments on the financial impact of this development will be communicated in conjunction with the release of Cardtronics’ fourth quarter 2014 results.