Article

Big fish, little fish: M&A in the ATM industry

With costs racking up for ADA regs, Windows 7 migration, the shift to EMV and more, an increasing number of IADs are looking to merge or divest their ATM business.

September 30, 2014 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

As operating margins get tighter and operating expenses balloon, independent ATM operators are finding themselves in an increasingly difficult predicament. To operate profitably, they need to scale up their business — and the sooner the better. But to achieve speedy expansion, they need capital that they either don’t have or don't have access to.

For many ATM deployers, the way out of this Catch 22 is to merge with or be acquired by another group. In the past few years or so, the industry has seen its share of small to mid-size IADs join ranks with larger companies.

Cardtronics has been a headline-maker in the acquisitions market. Over the past 18 months, the IAD and Allpoint Network parent company has snapped up a half-dozen local and regional IADs (and ancillary providers such as the ATM marketing firm i-design) both here and abroad in its quest to expand into new territory.

One of these companies was Merrimak ATM Group LLC of Rohnert, California, owner-operator of a large network of machines in hotels, convenience stores, supermarkets, movie theatres and flea markets.

Serving as strategic advisor to Merrimak on the sale was Boston-based Tremont Capital Group, a firm that advises and supports ATM and payments industry clients in the areas of mergers, acquisitions, divestitures, valuation, risk mitigation, and other key business areas.

This month at the ATM & Mobile Innovation Summit, ATM Marketplace caught up with Tremont CEO Sam Ditzion. In the video below, he talks about the current state and future outlook for mergers and acquisitions in the ATM industry.

graphic: frits ahlfeldt | public domain 

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.