Bank of Queensland today announced the sale of its ATM Solutions Australasia business to Macquarie Bank for an enterprise value of $64 million.
Managing Director David Liddy said the sale was the centrepiece of a new ATM strategic alliance between Bank of Queensland and Macquarie Bank which would ensure the continued growth of BOQ’s branded ATM fleet, and the future development of ATM Solutions Australasia Pty Ltd.
Macquarie will maintain BOQ branding on the existing 1,700 BOQ-branded ATMs and extend branding to selected additional ATMs in the future, and BOQ customers will continue to receive concessional fee treatment for use of BOQ-branded ATMs across Australia.
“As well as generating a strong profit, this alliance allows Bank of Queensland to continue to have a national, BOQ-branded ATM fleet and an alternative revenue stream through acquiring income. These were the two principal reasons for purchasing the ATM business in the first place,” Mr Liddy said today.
BOQ will remain as transaction acquirer for ATM Solutions, at market rates, for the next five years. BOQ will remain as cash servicer and Macquarie will also pay a branding fee to BOQ for five years.
“The formation of this strategic alliance between Bank of Queensland and Macquarie will bring benefits to both parties while also ensuring that the ATM Solutions Australasia business can develop into new markets with a broader customer base,” Mr Liddy said.
Bank of Queensland purchased ATM Solutions Australasia in September 2003 and has presided over unprecedented growth in the company, which has grown its ATM fleet from approximately 900 machines to more than 2,400 machines nationwide. It is the third largest ATM fleet in the country.
“We have effectively doubled the value of ATM Solutions since our purchase less than two years ago,” Mr Liddy said.
He said the strategic objective for Bank of Queensland’s purchase of ATM Solutions had been achieved and there was no need for the Bank to continue its ownership of the company.
“For Bank of Queensland there are legitimate capital reasons for selling ATM Solutions, particularly as we can maintain our strategic objectives for purchasing the ATM network in the first place.
“Currently the Bank is required to hold Tier 1 capital of approximately $20 million against the investment. This alliance with Macquarie frees up that capital while ensuring continued access for our customers to a growing ATM network,” Mr Liddy said.
“And for the future of ATM Solutions it was important that it be allowed to spread its wings and look to other potential financial services clients who desire their own ATM fleet, but are not inclined to use ATM Solutions while it is owned by us.
“This way BOQ and ATM Solutions, and through them Macquarie, get the best of both worlds.”
Macquarie will acquire ATM Solutions for an enterprise value of $64 million which includes assumption of debt and other deductions held by ATM Solutions of $22.5 million. The sale will result in Net Profit Before Tax of $23 million and Net Profit After Tax of $15.5 million for Bank of Queensland.
“This is a significant return for BOQ on our $18 million purchase in September 2003,” Mr Liddy said.
Mr Liddy said he was happy that Macquarie had also agreed to retain the very successful management team in place at ATM Solutions.
“I am also delighted to announce that Macquarie has retained ATM Solutions founder, Tim Wildash, and appointed him CEO of the company. Macquarie and BOQ both feel that the company will benefit from continuity of leadership and the skills Tim brings to the growth plans of Macquarie,” he said.
Mr Liddy said Bank of Queensland would continue to expand its branded ATMs across Australia as part of this relationship.
“For Bank of Queensland customers it means we will continue to provide the great service and access we have guaranteed and which supports our rapid branch expansion interstate,” he said.
BOQ has announced that it will open 100 interstate branches by August 2006 with 26 branches already opened in New South Wales, Victoria and the ACT reinforcing its Queensland branch network of 139 branches.