CALGARY, ALBERTA - (Marketwire - July 31, 2010) - DirectCash Income Fund (the "Fund") (TSX:DCI.UN) announced today that the Fund's operating subsidiary partnership, DirectCash ATM Processing Partnership (the "DirectCash Partnership"), entered into agreements and closed a transaction to acquire certain automated teller machine contracts of Cashline Inc. ("Cashline"), a privately held corporation based in Victoria, BC. The purchase price was $16.1 million including working capital such as inventory, prepaid expenses and accounts receivable. The acquisition is subject to customary purchase adjustments and holdbacks and was funded from DirectCash's acquisition credit facility, which has been increased to accommodate this transaction. To finance this acquisition DirectCash increased its acquisition credit facility from $40 million to $57 million and its revolving line of credit from $20 million to $30 million to accommodate the expected increase in vault cash requirements. The interest rate on both credit facilities was reduced from prime plus 1% to prime plus 0.375%.
A total of 830 ATM sites and related contracts were acquired by DirectCash with the majority located in British Columbia and Alberta. During the next few months DirectCash will be transitioning the acquired ATMs onto its ATM transaction processing and management system. The acquisition of these ATM contracts will bring the total number of DirectCash ATM active sites/contracts to approximately 7,350. A significant portion of the ATMs acquired are placement ATMs whereby Cashline owned the ATM.
The acquisition is expected to be accretive to per unit distributable cash flow.
About Cashline:
Cashline was founded in 1997 by Stephen Clark, based in Victoria, B.C. Prior to starting Cashline Stephen Clark was one of the co founders of Money Mart. Stephen Clark and key employees have agreed to employment contracts with DirectCash as part of this transaction.
Cashline has been successful in creating a very profitable and well managed portfolio of ATM's that produce higher transaction volumes than the average ATM in Canada. A significant portion of the Cashline business is the operation of placement ATMs whereby Cashline owns the ATM and fills the cash in the ATM. Since inception Cashline has created a strong profitable network of ATMs through its commitment to service and support of its customers and brand. Cashline is an exceptional well known ATM operator in Canada.
Management's Commentary:
"We are very excited about this acquisition as it significantly increases our ATM market presence in British Columbia, Cashline is an exceptional ATM operator in Canada with excellent employees and quality contracts in place with ATM locations. Cashline has been in the business since 1997 and has proven to be a strong competitor with excellent customer service and a reputable brand. We are excited to have the opportunity to add these quality contracted ATM assets, as well as the Cashline success and experience to our portfolio." said Jeffrey Smith, DirectCash's President and Chief Executive Officer.
DirectCash Business:
The operating subsidiaries of the Fund (such subsidiary limited partnerships, partnerships and corporations are collectively referred to as "DirectCash") are the largest branded ATM provider in Canada operating under the tradename DirectCash ATM. DirectCash is also one of the leading providers in Canada of branded non-financial institution debit terminals and prepaid debit and credit card products.
Additional Information:
Additional information about the Fund and the Fund's operating subsidiaries, including the Fund's Annual Information Form and other public filings is available on SEDAR (www.sedar.com) and on the DirectCash's website (www.directcash.net).
www.directcash.net
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