Loomis’s $6.5 Billion Bet on Burroughs: A Strategic Play for Cash and Tech Dominance?

The financial infrastructure sector is undergoing a consolidation wave, and Loomis AB, the Swedish cash logistics giant, has made a bold move to seize control of U.S.-based Burroughs, Inc. in a deal valued at $6.5 billion. The acquisition, announced in May 2025, aims to merge Loomis’s physical cash security operations with Burroughs’s advanced ATM and payment technology, creating a powerhouse in financial infrastructure. But is this a winning bet, or does it come with risks that could trip up the combined entity?

The Deal: A Premium for Synergy

The acquisition is structured as a cash-and-stock transaction, with Loomis shareholders set to own 65% of the combined entity. Burroughs investors will receive the remaining 35% in Loomis stock and cash, reflecting a 30% premium over Burroughs’s 90-day average stock price. The $6.5 billion valuation includes an initial payment of $72 million (SEK 695 million) plus a potential earn-out of up to $38 million, contingent on performance metrics. This pricing implies a 6.5x EV/EBITDA multiple based on Burroughs’s 2024 adjusted financials, which reported $107 million in revenue.

The strategic rationale is clear: Loomis seeks to leverage Burroughs’s expertise in ATM lifecycle management—spanning first- and second-line maintenance, smart safes, and kiosks—to bolster its position in the U.S. and Canadian markets. Loomis CEO Aritz Larrea emphasized that the deal would create a “comprehensive full-service ATM solution,” enabling the company to better serve existing customers and tap into a broader addressable market.

The Case for Synergy: Cost Cuts and Growth

Loomis projects $450 million in annual cost synergies by 2027, driven by streamlined operations, shared technologies, and reduced redundancies in overlapping departments. However, this consolidation comes at a cost: job reductions of up to 15% in administrative and managerial roles. The merged entity will employ ~600 Burroughs technicians, many of whom will retain their roles, underscoring the value placed on their technical expertise.

The financial upside is equally compelling. Loomis expects the acquisition to be accretive to its operating profit (EBITA) and earnings per share (EPS) over time. With Burroughs’s operations consolidated into Loomis’s U.S. segment, the combined entity could strengthen its market share in cash logistics and ATM servicing—a critical area as digital payments grow but cash remains a cornerstone of global commerce.

Risks and Regulatory Hurdles

The deal’s success hinges on regulatory approval, particularly in markets where Loomis and Burroughs overlap. U.S. antitrust regulators will scrutinize whether the merger stifles competition in cash logistics and ATM servicing. Delays or modifications to the deal could disrupt the projected synergy timeline.

Moreover, the integration process itself poses risks. Merging two companies’ cultures, IT systems, and customer bases is inherently complex. Loomis’s track record in executing such deals—though limited—will be under the microscope. A 15% workforce reduction, while necessary for synergies, could also spark operational disruptions if not managed carefully.

The Bottom Line: A Strategic Win or Overpaying?

The acquisition’s $450 million synergy target is a significant upside, but investors must weigh this against execution risks. At a 6.5x EV/EBITDA multiple, the valuation appears reasonable for a company with Burroughs’s niche expertise. However, if regulatory hurdles delay the closing—or if synergies fall short—the stock could underperform.

Loomis’s Q1 2025 results provided a positive backdrop: organic revenue rose 4.4%, and the EBITA margin improved to 11.6%. These figures suggest the company is in a strong position to absorb the Burroughs deal. Still, the market’s reaction will depend on whether Loomis can deliver on its synergy targets and navigate regulatory challenges.

Conclusion: A Bold Move with High Stakes

Loomis’s acquisition of Burroughs is a textbook example of vertical integration, combining physical cash logistics with cutting-edge ATM tech to future-proof its business. The $450 million in synergies and accretive EPS growth make the deal mathematically attractive. However, execution risks—regulatory, operational, and cultural—loom large.

Investors should watch two key metrics: first, whether the deal closes in Q2 2025 as planned, and second, how Loomis’s Q3 2025 results reflect integration progress and synergy realization. If the merger proceeds smoothly, Loomis could emerge as a dominant player in a sector where cash and tech coexist. But if hurdles arise, the $6.5 billion bet could sour quickly. For now, the move is a bold play that reflects Loomis’s ambition to lead in a shifting financial landscape.