News

Investor buy-in gives Canadian IAD a running start

February 28, 2017

Gunpowder Capital Corp., a Toronto-based merchant bank and advisory services firm, has acquired a 12.5 percent equity interest in JIT Financial Inc., a company serving Canada's ATM industry.

JIT will get off the ground with the acquisition of 550 ATMs in the greater Toronto area, and later, plans to acquire other ATM companies in order to expand its footprint, according to a press release.

Gunpowder Capital will loan JIT the funds to obtain the ATMs and the cash required to fill them. In return for the acquisition loan, Gunpowder will earn 10 percent interest per annum and a royalty payment of 10 cents per ATM transaction in perpetuity, in addition to its 12.5 percent equity stake. In return for the vaulting funds, Gunpowder will earn a fee of 30 cents per ATM transaction.

"The ATM business model is a proven low-risk model that provides a high margin of return, while requiring low overhead to run effectively," JIT Chairman of the Board Paul Haber said in the release. "We believe this investment will provide a significant return to our shareholders. We expect that we will be able to acquire other businesses and significantly grow this business."