Huge Deal Eyed In ATMs

PORTLAND, Ore. - (06/05/06) – Shares in financially ailingTRM Corp. rose 10% last week after reports that Cardtronics wasdiscussing a possible acquisition of the company to create anindustry giant with almost 43,000 ATMs across the country. Bothcompanies have been mired in debt since major ATMdeals–TRM’s acquisition of 14,000 eFunds machines in2005 and Cardtronics’ acquisition of E*Trade’s 13,000ATMs in 2004–but Cardtronics has much deeper pockets tofinance a deal, said by Wall Street sources to be around $275million. Representatives of both companies refused to comment.Cardtronics hasn’t released audited financial since lastyear’s third quarter when it disclosed a meager $507,000 inearnings for the first three quarters, but is owned by two majorventure firms, TA Associates, of Boston, and CapStreet Group, ofHouston. TRM, which provides 6,500 co-branded ATMs for the CO-OPNetwork, reported losses of $9 million for 2005 and of $1.5 millionfor the first quarter of 2006. The company has been in play sinceJanuary when it hired investment bank Allen & Co. to shop itaround. Cardtronics reaches deep into the credit union market byvirtue of link to the Credit Union 24 network and through itsacquisition earlier this year of the surcharge-free Allpointnetwork, which claims dozens of credit unions as members. Acombination of Cardtronics’ 25,000 ATM and TRM’s 18,000machines would dwarf Bank of America’s fleet of 17,000 ATMs,the biggest bank-owned fleet. BofA, is also the banker for bothCardtronics and TRM.