Cardtronics Inc. expects the 6,200 machines its ATM Network Inc. acquisition brings to provide potential marketing and advertising opportunities.
Subsidiary Cardtronics USA Inc. has acquired the assets of the Minneapolis-based independent sales organization, including its merchant contracts, customer relationships, online store and Web properties. The companies did not disclose the financial terms of the deal.
Though the company has no immediate plans to include advertising or other types of promotions on the machines, Houston-based Cardtronics is in the process of deploying new video software to some of the 61,200 ATMs that are now in its portfolio, Steve Rathgaber, Cardtronics CEO, said in an interview.
Cardtronics owns and manages most of its ATMs, but the ATM Network deal, announced Aug. 8, brings on machines owned by merchants. The merchants will replenish the ATMs using their cash and set the surcharge fees, and Cardtronics will process the machines’ transactions.
"We like to blend our portfolio with different assets to sort of diversify, and this helps us do that," Rathgaber said.
Cardtronics plans to convert the ATM Network machines to its processing platform over time as contracts with the merchants come up for renewal, Rathgaber said.
Cardtronics has no immediate plans to bring the ATM Network machines into its Allpoint surcharge-free ATM network, Rathgaber said, noting any such attempts would be negotiated a case-by-case basis, if Cardtronics determines the merchants could benefit from such ties.
ATM Network's head office in Minnesota now belongs to Cardtronics. Phil Rock, who was the network's primary owner, will stay on as executive vice president of the company's merchant-owned business unit. Cardtronics also expects the ISO's remaining management team to stay on.
Founded in 1996, ATM Network was a privately owned provider of ATM services to independent merchants, primarily on the local level, whose clients now span all 50 states and Washington, D.C. Among its biggest clients is Mall of America in Minneapolis, Rathgaber said.
The acquisition of ATM Network's assets pushes Cardtronics' merchant-owned ATM count to 21,300 machines under contract. The rest are company-owned.
The acquisition should benefit Cardtronics as it looks to expand and gain scale to provide more features and functions for its ATMs, if it so chooses to do so, says Madeline Aufseeser, senior analyst at Aite Group.
"This is just another way to complement their business and expand their network," she says. "It provides one more channel and entry access into their existing network."