Cardtronics Sets Initial IPO Terms (CATM, DBD, NCR, TDC)

Cardtronics Inc. (NASDAQ:CATM) has set the initial range and terms for its IPO.  The company is indicated to sell 16.666 million shares of common stock at a price range of $14 to $16 per share, although half of the shares are from the company and half are from senior management and selling shareholders.  The underwriting group is rather large: Deutsche Bank, William Blair, Banc of America, JPMorgan, Piper Jaffray, and RBC Capital Markets.

Cardtronics, Inc. claims the world’s largest network of ATMs, with over 31,500 ATMs in merchant locations throughout the U.S., the U.K., and Mexico. Approximately 19,600 of the ATMs are Company-owned and 11,900 are merchant-owned. Over 9,500 of its Company-owned ATMs are under contract with well-known banks to place their logos on those machines and provide surcharge-free  access to their customers.  Cardtronics also operates the Allpoint network, which sells surcharge-free access to financial institutions that lack a significant ATM network.

outside of the 7-Eleven loss revenues, the company generated pro forma revenues for the 12-months ended Dec. 31, 2006 of $439.3 million and for the 9-months ended Sept. 30, 2007 of $345.7 million.  But there is a difference between net and pro forma.  Excluding the pro forma effects of the 7-Eleven ATM Transaction, it generated revenues of $293.6 million for the year ended December 31, 2006 and $262.3 million for the 9-months ended September 30, 2007.

The first thing you would say is that this competes against Diebold, Inc. (NYSE:DBD), although the company uses their ATM’s and Diebold actually owns a tiny stake in the company.  Diebold is a primary maintenance vendor and Diebold is one of its key ATM suppliers, NCR (NYSE:NCR) is also a primary maintenance vendor and is also an ATM supplier to the company.

We had reviewed this for a potential special situation investing newsletter pick in the past around the filing, but Diebold couldn’t really be looked at as a back-door plays as it didn’t have a significant enough of a stake; and NCR was going through its own special situation in its spin-off of Teradata (NYSE:TDC).

We frequently send out more data to our open and free email distribution list, and we also cover similar situations in the special situation investing newsletter.

Jon C. Ogg
November 21, 2007