News

UPDATED: Cardtronics signs ATM agreement with UK's Co-op grocery chain

Under the agreement, Cardtronics will purchase the Co-op Group's ATM cash management and maintenance arm, Sunwin Services.

September 5, 2014

Editor's note: The original version of this story said that Co-op was the largest grocery chain in the U.K. In fact it is not the largest, but is among the largest, ranking fifth in the number of U.K. outlets. ATM Marketplace regrets the error.

The U.K.-based division of Cardtronics is entering into a seven-year, exclusive agreement to operate approximately 1,800 ATMs located in Co-operative Food stores across the U.K. Co-op Food is part of the larger Co-op Group, and operates a food store in every U.K. postal area.

Cardtronics will take on the operation of the current Co-op ATMs no later than January 2016, upon expiration of the existing ATM contract.

In addition, beginning immediately, Cardtronics will have the right to install and operate ATMs in hundreds of Co-op Food locations that do not currently have an ATM, as well as in any new Co-op Food stores, according to a Cardtronics news release.

As part of the deal, Cardtronics also will acquire ownership of Sunwin Services Group, a subsidiary of the Co-operative Group. SSG's primary business is providing secure cash logistics and ATM maintenance to the Co-op Food ATM estate. SSG provides the same services to other divisions of the group, as well as to outside customers.

Combining SSG with Cardtronics' existing internal secure cash logistics and ATM maintenance capabilities will strengthen Cardtronics' integrated ATM services model and bring more complete geographic coverage in the U.K., the news release said.

"We believe this deal delivers great value for all of our stakeholders," said Cardtronics CEO Steve Rathgaber. "[T]he agreement to operate the existing Co-op Food stores' 1,800-strong ATM estate will significantly expand our core U.K. business. Since the acquisition of Cardpoint Services last year, our U.K. business has been growing impressively and this transaction adds to our solid base for continued profit growth in the U.K."

Purchase consideration of approximately 35 million pounds ($57.64 million) will be paid to the Co-op Group in stages upon the passage of time and fulfillment of certain performance conditions. Cardtronics will acquire ownership of SSG upon the close of this transaction, which is expected to occur in November 2014.