Loomis Bolsters US ATM Dominance with Strategic $72M Acquisition of Burroughs, Inc.

Loomis AB, the global leader in cash handling and secure logistics, has taken a significant step to strengthen its position in the U.S. ATM and automated solutions market by acquiring Burroughs, Inc. for an initial $72 million (SEK 695 million), with potential earn-outs elevating the total value to up to $110 million. This move underscores Loomis’ ambition to expand its service offerings and capitalize on growing demand for end-to-end ATM lifecycle management solutions.

Strategic Rationale: Building a Full-Service Ecosystem

The acquisition of Burroughs, a U.S.-based provider of comprehensive ATM lifecycle management services, aligns with Loomis’ strategic priorities outlined in its 2024-2027 Capital Markets Day presentation. Key drivers include:
1. Market Penetration: Burroughs’ $107 million in 2024 revenue and 600 skilled technicians enhance Loomis’ ability to offer a “full-service ATM solution,” combining first- and second-line maintenance, remote monitoring, and predictive analytics. This positions Loomis to better serve its existing customer base and attract new clients in the U.S. and Canada.
2. Operational Synergies: By consolidating Burroughs into its Segment USA, Loomis reduces reliance on third-party service providers, improving control over its supply chain and operational efficiency. CEO Aritz Larrea highlighted that this integration will drive adjacent revenue streams through cross-selling of services.
3. Sustainability Alignment: Burroughs’ OEM-agnostic capabilities (compatible with all ATM brands) and emphasis on digital payment solutions resonate with Loomis’ goal of reducing its environmental footprint. For instance, remote monitoring and predictive maintenance can lower carbon emissions by optimizing service routes and minimizing onsite visits.

Financial Implications: A Value-Accretive Move

The transaction is financially compelling for Loomis:
- The 6.5x EV/EBITDA multiple reflects a disciplined valuation, given Burroughs’ strong profitability and recurring revenue model.
- The deal is cash-neutral, funded through existing liquidity and credit facilities, with no material impact on Loomis’ debt ratio.
- Management projects the acquisition to be accretive to EBITA and EPS over time, as synergies and revenue growth offset integration costs.

Market Context: Riding the ATM and Digital Payment Wave

The global ATM market is projected to grow at a CAGR of 4.2% through 2030, driven by rising demand for cashless transactions and ATM modernization. Loomis’ acquisition positions it to capitalize on this trend:
- Digital Transformation: Burroughs’ expertise in unattended self-service technology and connected devices complements Loomis’ existing cash-in-transit operations, enabling it to offer integrated solutions for both physical and digital payment ecosystems.
- Competitive Advantage: With Burroughs’ customer network and technical capabilities, Loomis strengthens its position against rivals like Diebold Nixdorf and Hyosung, which are also expanding in the U.S. market.

Risks and Considerations

While the acquisition is strategically sound, risks remain:
- Economic Volatility: A slowdown in U.S. consumer spending could reduce ATM usage and service demand.
- Integration Challenges: Retaining Burroughs’ management team is a positive step, but cultural alignment and operational cohesion will be critical to realize synergies.
- Regulatory Hurdles: Compliance with evolving data privacy and cybersecurity regulations in North America may require additional investments.

Conclusion: A Strategic Win for Loomis’ Long-Term Growth

Loomis’ acquisition of Burroughs, Inc. is a well-calculated move to solidify its leadership in the U.S. ATM and automated solutions market. With a 6.5x EV/EBITDA multiple, an accretive financial profile, and synergies aligned with its sustainability goals, this transaction is a textbook example of how M&A can drive top-line growth and operational efficiency.

Loomis’ 2024 revenue of SEK 30 billion and its 5-7% CAGR target through 2027 suggest that this deal is a critical step toward achieving those goals. Investors should also note the LTIP 2025 incentives, which tie executive compensation to EBITA growth and CO₂ reduction targets—ensuring alignment between management and long-term shareholder value.

By acquiring Burroughs, Loomis has not only expanded its service portfolio but also positioned itself to capitalize on the $6.2 billion global ATM services market. This move is a strong signal of the company’s ability to navigate industry trends and deliver sustainable growth for years to come.