Stargroup in $6.5m assets buy

Perth-based ATM machine operator Stargroup expects to return to the black after acquiring 109 ATMs from Cash Plus Australia for $6.5 million in cash and shares.

Stargroup, which was recently acquired by ATM entrepreneur Todd Zani’s ASX-listed cash machine manufacturer iCash Payments, is buying 109 ATM machines from Cash Plus in exchange for $3.25 million in cash and $3.25 million in shares valued at 4 cents each.

The acquisition will boost Stargroup’s network to 230 machines processing about 1.8 million transactions per annum, with the company to also acquire supporting ATM site agreements and modems supplied and maintained by New Zealand-based VComms Connect.

Stargroup also plans to undertake a two-for-five non-renounceable rights issue to raise $3 million (at 3.5 cents a share) as part of the acquisition.

If the deal is successful, the company expects its revenue to grow from $2.6 million to $4.6 million for the 2016 financial year, while a loss of $731,916 is expected to be turned into a profit of $592,464.

“Earnings accretive acquisitions are very much a part of the strategy that we laid out when we first merged with iCash and we are delighted that this first acquisition is such a high quality one,” Stargroup chief executive Mr Zani said.

“This acquisition is part of our commitment to becoming the largest ASX-listed ATM and payment services provider in Australia.”

Stargroup shares rose 3.1 per cent to 3.3 cents each at 11am.