NCR’s $1.7 Billion Cardtronics Bid Signals Appeal Of ATM, Debit Network


Cash. Digital. Even cryptos – and post-pandemic, a quickening embrace of the ATM.

To that end, and as reported, NCR is looking to buy Cardtronics, in a deal that takes place amid recent news that Apollo Global and Hudson Executive Capital, private equity firms, were also gunning for Cardtronics.

The PE firms would reportedly pony up $35 a share, and the NCR proposal would offer $39 per Cardtronics share, which would be equivalent to about $1.7 billion.

Let the games, as they say, begin – as a bidding war seems to be in the works, with an eye on self-service banking.

As noted in this space over the weekend, there already exists a preliminary agreement between Cardtronics and the investment firms, but the higher price tag offered by NCR will likely spark a re-examination of a deal.

As to the strategy behind any final announcement – no matter who the linkup may be with, or what the final price tag might be — there are signs as to what Cardtronics may seek through an agreement. In a question-and-answer session with employees about the proposed sale to the private equity firms (which, as of this week, may or may not happen), per an SEC filing, Cardtronics CEO Ed West said the buyers would be interested in broadening Cardtronics beyond its traditional cash-focused ATM activities – namely, where ATM users withdraw cash at machines.

Looking Toward Digital-First  

NCR made its bid official on Monday morning (Jan. 11), and in a statement, Michael Hayford, president and CEO of NCR, said, “The acquisition of Cardtronics will accelerate and expand the NCR-as-a-service strategy that we outlined at our Investor Day last month. Cardtronics’ debit network is highly complementary to NCR’s payments platform, and will enable the combined company to seamlessly connect retail and bank customers while capitalizing on the banking industry’s transition toward infrastructure outsourcing.”

In terms of the respective footprints of NCR and Cardtronics — specifically, a physical brick-and-mortar presence – Cardtronics has 285,000 ATMs in 10 countries.

Earlier this month, Doug Brown, senior vice president and general manager of digital banking at NCR, told Karen Webster that in looking at general strategy (the interview was conducted before NCR’s Cardtronics bid was announced), that amid the pandemic, “the three verticals that we service at NCR today — banking, restaurants and retail — I think had the common bond  that was all about, ‘how do you simplify operations and the customer experience?’” Brown said. “So we led with technology.”  Banks, he noted, are increasingly having to embrace a digital-first experience.

And amid that digital-first mindset, the banking experience may be increasingly moving toward self-service. As reported by ATM Marketplace, in looking out at 2021 and beyond, “banks have for many years relied on technology to reduce their costs and increase efficiencies so they can distribute their products and services to customers using the most appropriate, cost-effective channels. Customer-centric technologies have provided the data and tools to manage relationships in the most profitable way.”

More than 20,000 branches are expected to close by the end of the year, as detailed in a recent PYMNTS study on digital-first banking. That comes as the total number of banks has declined across the U.S. by 7 percent, as measured through the past half-decade. But there still remains the desire to have branch banking services, as 35 percent of customers surveyed want access to those activities. One quarter wants shorter teller lines and 31 percent want longer operating hours — and those desires are leading banks to deploy self-service kiosks and upgraded ATMs.

Drilling down a bit, these ATMs can leverage everything from contactless activities to biometrics to cryptos. In one example, last week, Intel Corp. introduced RealSense ID, billed as an on-device solution that combines an active depth sensor with a “specialized neural network” designed for facial authentication, according to a press release. That technology would work with ATMs and with other settings such as the point of sale, the company has said. Elsewhere, as reported late last year, the number of “bitcoin ATMs” jumped in 2020, rising by 85 percent to just under 11,800.

A number of trends are converging at the ATM, then, and for Cardtronics, the suitors are lining up.

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