Piper Jaffray Reiterates Overweight On Cardtronics

Piper Jaffray is reiterating its Overweight rating and $24 price target on shares of Cardtronics Inc. CATM. In a note to clients, Piper Jaffray writes, "CATM announced an agreement to acquire EDC for about $145m. The deal will be financed with availability under its $220M credit facility. CATM said it will be accretive to 2011 adjusted earnings and increasingly accretive in future years as synergies are realized. EDC has 3,700 owned ATMs and "numerous placement agreements with high growth retailers" as well as bank branding agreements. On the surface, the purchase price appears a bit high, with a purchase price of 2.6x EDC's $56m of TTM revenue as of 3/31 vs. a 2.2x EV/revenue valuation for CATM. Based on '10 numbers, we roughly estimate adjusted earnings accretion of $0.06/share proforma for '10. CATM will be holding a conference call at 8:30AM ET Wednesday morning. We reiterate our Overweight rating and $24 target price." Shares of CATM gained 39 cents yesterday to close at $21.39, a gain of 1.86%.