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A Wave of Consolidation in the Cash Management Industry

Categories : Cash is efficient
February 28, 2020
Tags : Brink's, cash management company, Consolidation, Loomis
Brink’s announces the acquisition of G4S cash operations and invests in Moneygram. Loomis consolidates its position in the Nordics, with the acquisition of Finnish ATM network Automatia. Crane Co acquires Cummins Allison.
Guillaume Lepecq

This post is also available in: Spanish

In January, The Wall Street Journal reported that companies linked to physical cash have seen their share price soar since the start of 2019. The average stock of four US-listed companies (Cardtronics, Diebold Nixdorf, Western Union and Brink’s) were up 83% on average in the last year, easily topping the 39% average gain for Mastercard, PayPal, Square and Visa.

 Brink’s acquires G4S cash activities

The Brink’s Company, the global leader in total cash management, route-based secure logistics and payment solutions, announced that it has agreed to purchase for approximately $860 million the majority of the cash operations of U.K.-based G4S, a global security and cash management company.

The G4S operations to be acquired generated pro forma 2019 revenue of approximately $800 million, operating prot of approximately $85 million and adjusted EBITDA of approximately $115 million. The transaction adds 14 new markets to the existing Brink’s footprint: the Netherlands, Malaysia, Romania, Belgium, Ireland, Kuwait, the Czech Republic, the Philippines, the Dominican Republic, Cyprus, Indonesia, Lithuania, Estonia and Latvia. It excludes the entire G4S Retail Cash Solutions business and cash operations in the U.K., South Africa and several smaller markets.

Doug Pertz, president and chief executive officer of Brink’s, said: “This transaction represents our largest acquisition to date and further demonstrates our disciplined approach to value-added capital allocation.  It positions us to extend our proven Strategy 1.0 organic revenue and operating prot growth initiatives into 14 new markets including cash-intensive, emerging growth markets in Asia and Eastern Europe.”

“In addition, our expanded global footprint is expected to provide new avenues for accelerated growth as we begin to execute our Strategy 2.0 initiatives, targeted to further penetrate the global cash ecosystem with new high- margin, less capital-intensive solutions. We look forward to closing the transaction, executing our strategic initiatives, and driving substantial revenue and prot growth.”

Brink’s also reached an agreement to acquire more than 500 ATMs from Allied Irish Bank (AIB). In January, the Irish media reported that Bank of Ireland aimed to sell off 700 ATMs and Allied Irish Bank 375, sparking anger from consumer associations who warned that this will likely lead to an increase in withdrawal fees for consumers.

Doug Pertz, said: “Our priority is to maintain the existing ATM estate and expand access to cash, particularly in underserved and rural communities. Most importantly, cardholders with bank accounts in the Republic of Ireland will receive the same level of service without incurring any additional fees or charges when using our ATMs.”

Earlier in February, Brink’s invested $9 million in MoneyGram International, one of the world’s largest money transfer companies. While MoneyGram’s digital transfers business has been growing by triple digits and is now available in 25 countries, there is still a very large element of cash-based money transfers and Brinks’ expertise in cash handling is a natural fit, while also giving it a route to transition into more digital services in the future.

Loomis acquires Finnish ATM network Automatia

Meanwhile, Loomis has entered into an agreement to acquire 100 percent of Automatia Pankkiautomaatit Oy (Automatia) from present owners Danske Bank, Nordea, and OP Financial Group. The enterprise value, i.e. purchase price plus acquired net debt, is approximately EUR 42 million.

Automatia operates the largest ATM network in Finland, under the Otto brand, and also offers nationwide cash supply services for bank branches, night safes for retailers and a digital platform for operating instant payments. Automatia, founded in 1994, has approximately 30 employees and annual net revenue, for the last twelve months ending in December 2019, was approximately EUR 42 million.

As part of the transaction, the sellers will commit to new long-term service agreements and continue to be significant customers of Automatia.

“As its new owner, Loomis will continue to develop Automatia’s businesses and will use Automatia’s know-how and payment platform internationally. “, says Patrik Andersson, President and CEO of Loomis.

In January, Loomis acquired the cash handling operations of Nokas in Sweden.

Crane Co acquires Cummins Allison

Crane Co, a diversified industrial products company headquartered in Connecticut, US, has announced the acquisition of Cummins Allison Corp for $160 million on a cash-free, debt-free basis.

Cummins Allison is a US manufacture of currency handling systems, including high-speed cash and coin counting and sorting machines, ATMs, retail cash office solutions and related software along with a nationwide service network.  The deal was closed on 31 December 2019 and Cummins Allison will become part of Crane Co’s Payment & Merchandising Technologies business unit, which also include Crane Payment Innovations (manufacturers of coin and banknote handling products) and the banknote printer and papermaker Crane Currency.

“Cummins Allison and Crane Payment Innovations (CPI) products are based on similar core technologies related to cash and coin sorting, counting and validation. And we expect sharing of technology and R&D across the two businesses. We see substantial synergies, most notably with material cost and supply chain, manufacturing productivity and R&D”, said Max Mitchell, Crane’s President & Chief Executive Officer.

This post is also available in: Spanish