Cardtronics Continues Buying Spree with Welch ATM

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Cardtronics Inc. (CATM) is set to buy Welch ATM for $160 million, expanding the ATM provider with an additional 26,000 kiosks.

The transaction marks an exit for private equity firm Rock Island Capital, which purchased Welch in 2010 for an undisclosed price. The Oakbrook, Illinois-based private equity firm hired Chicago investment bank William Blair & Co. LLC in April to look for a buyer for Welch.

Peoria, Illinois-based Welch counts pharmacies Walgreen Co. (WAG) and Rite Aid Corp. (RAD) among its most notable customers, as well as theme parks SeaWorld, Busch Gardens and Sesame Place.

Upon completion of the transaction, the combined company will own roughly 109,600 ATMs in total, including 92,500 in the U.S.

By purchasing Welch, Cardtronics expects to grow the company's client list further, says Cardtronics CEO Steve Rathgaber in a prepared statement.

Once the deal is finalized, Welch CEO Jeff Hewitt is expected to join Cardtronics as executive vice president, overseeing all U.S. sales and customer relationship initiatives.

Cardtronics has been buying up many smaller targets in recent years. In August 2013, Cardtronics purchased Cardpoint Ltd., an operator of 7,100 ATMs in the U.K. and Germany, for $153 million cash. Before that, the Houston company picked up Aptus Group, LLC, a Portland, Oregon-based ATM operator of 3,300 merchant-owned ATMs; Merrimak ATM Group, LLC, a Rohnert Park, California-based operator of 4,800 merchant-owned ATMs; and I-design group plc, a Scotland-based provider and developer of marketing and advertising software and services for ATM owners.

Other ATM service companies have been acquisitive as well. In May, payments processing company eGlobal LLC bought the assets of The Best There Is Inc., a provider of ATM services in Boca Raton, Fla.

William Blair managing director Rob Metzger led the sale process for Welch, with fellow bankers Phil Olson, Dan Laszlo and Rob Wurzburg.

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