As the payments and banking markets change as a result of mobile and social media, and banks re-position themselves and slim down their operations, new opportunities and further growth should open up for the US ATM giant Cardtronics. The company is strengthening its position in the UK market with the acquisition of Cardpoint Ltd.
Cardtronics has paid £100m for Cardpoint Limited, trading as Cashzone in the UK and previously owned by Payzone Ventures, and has thus added 7,100 ATMs (or Automated Teller Machines) in the UK and 800 in Germany to its portfolio. Consequently, the new division, Cardtronics Europe will own 4,600 Free-to-Use and 6,800 Pay-to-Use ATMs in the UK, or roughly one-third of the non-bank ATM market. Revenue for Cardtronics Europe is estimated at US$230m with Adjusted EBITDA of US$47.5m, or 21%. Cardtronics now operates over 80,000 ATMs worldwide and foresees synergies in terms of operating efficiencies and lower costs as well as significant value from commercial partnerships and business development. This acquisition could be an effective land grab in a profitable area of a dynamic market.
With the highest rate of use in Europe, £194bn was dispensed over 65,000 such ATMs in the UK in 2012. Their use has now expanded beyond cash delivery, to include foreign exchange, mobile top-up, advertising, parking payment and a growing list of other services. This deal highlights the potential in this market and could generate opportunities for the UK IT Services sector as companies move to exploit this interesting channel for service delivery and customer interaction.