Deal Watch: Troubled TRM gets loan, buys company

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Sunday, June 01, 2008

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IN LATE APRIL Portland-based ATM network operator TRM Corp. created one of the largest nonbank ATM networks in the nation when it purchased New Jersey-based LJR Consulting, which does business as Access To Money, for $15 million. Part of the funding for the deal came from an $11 million loan that TRM raised the same month, which the company is also using to pay down its debts. But for financially troubled TRM, growth is perhaps a curious choice, says ATM Magazine editor Tracy Kitten.

April also brought plenty of bad news. TRM’s auditor, accounting firm McGladrey & Pullen, issued a warning concerning TRM’s ability to stay in business. (TRM’s previous independent auditor, PricewaterhouseCoopers, raised the same concern in 2007 and declined to stand for reappointment.) The company’s stock was delisted from Nasdaq for not meeting the minimum price requirement. And TRM announced revenue had dropped 16% and it had lost $8.43 million in 2007 — its third year in the red.

The company, which is on its third CEO in as many years, jettisoned its foreign and domestic photocopier business and other side businesses last year in an attempt to regain the black. Selling its subsidiaries allowed the company to cut its workforce from about 400 workers to 40.

The purchase of Access To Money moves the company in the opposite direction, increasing the size of its ATM network to 12,200 machines, most of which are in convenience-store chains. Kitten says she would have expected to see the company continue to tighten.

TRM, however, may be making a smart move. Increasing gas prices — which raise operating costs — and economic pressures — such as costly but required upgrades — are making things difficult for smaller ATM network operators. “In order to absorb some of those losses, in order to survive, maybe you need some cushion and some size,” Kitten says.                         

ABRAHAM HYATT

MERGERS AND ACQUISITIONS
PRICE (TERMS) EXP. CLOSE BUYER / PARENT (HQ) SELLER (HQ) / PARENT ANNOUNCED
$15M (cash, stock, debt) Q2 ‘08 TRM (Portland) LJR Consulting (NJ) 4/29
ND (cash) Q2 ‘08 Hanover Partners (Lake Oswego) Pyramid Technologies (AZ) 4/17
ND Q2 ‘08 Market Decisions (Portland) call center (NM)/ Research Data Design 4/18
ND Q2 ‘08 Smarsh (Portland) CentraScan (CT) 4/18
ND Q2 ‘08 Smarsh (Portland) Financial Visions (CA) 4/22
ND Q2 ‘08 Strands (Corvallis) Expensr (CA) 4/22
REAL ESTATE TRANSACTIONS
PRICE BUYER / PARENT (HQ) REAL ESTATE (LOCATION) / SELLER (HQ) ANNOUNCED
$45M The Matteson Cos. Harrison Tower Apartments (Portland)/ Bean Investment Real Estate; Williams & Dame Development 4/16
$20M Carlyle Investment Company research facilities (Hillsboro)/ Credence Systems 4/16
$4.5M Stephen Moses Interests Vick Building (Salem)/ Vernon Hill Associates II 4/28
$3.17M Bannon Land 1 The Evergreen Park Apartments (Portland)/ JC Equities VI 4/23
$2.45M YKHW Cedars in the Woodland hotel (WA)/ Sandhu NW Hospitality 4/24
$2.10M Knez Realty Group Samrose Salmon Center (Portland)/ Samrose Salmon Center 4/23
CAPITAL RAISING
PRICE (TERMS) COMPANY (HQ) / LEADERSHIP INVESTOR (HQ) ANNOUNCED
$74M (debt) ScanlanKemperBard Companies (Portland)/ Robert D. Scanlan, chairman & CEO Bank of America 4/17
$60M (state grant) Vaccine & Gene Therapy Institute (FL)/OHSU (Portland)/ Dr. Jay Nelson, director Innovation Incentive Fund (FL) 4/28
$47M (bond) Reed College (Portland)/ Colin Diver, president public offering 4/22
$25M (donated office space) OSU (Corvallis)/ Dr. Edward Ray, president Hewlett Packard (Corvallis) 4/23
$11M (credit facility) TRM (Portland)/ Richard Stern, president & CEO LC Capital Master Fund Ltd (NY) 4/18
$5.64M (bond) Mt Hood Community College (Gresham)/ Dr. John J. Sygielski, president public offering 4/23
$3.5M (bond) Linn-Benton Community College (Albany)/ Rita Cavin, president public offering 4/8
$328K (state grant) Enterprise for Employment and Education (Salem)/ Agnes Balassa, exec. director Employer Workforce Training Fund (Portland) 4/30
$303K (state grant) Clackamas Community College (Oregon City)/ Joanne Truesdell, president Employer Workforce Training Fund (Portland) 4/30
$275K (state grant) Lane Workforce Partnership (Eugene)/ Chuck Forster, exec. director Employer Workforce Training Fund (Portland) 4/30
$128K (state grant) Southwestern Oregon Community College (Coos Bay)/ Dr. Judith M.L. Hansen, president Employer Workforce Training Fund (Portland) 4/30
$128K (state grant) SCOEDE (Klamath Falls)/ Betty Riley, executive director Employer Workforce Training Fund (Portland) 4/30
$128K (state grant) Rogue Valley Workforce Development Council (Medford)/ Ron Fox, executive director Employer Workforce Training Fund (Portland) 4/30
$32K (state grant) SOPHEC (Medford)/ David Matthews, executive director Employer Workforce Training Fund (Portland) 4/30

List researched by Mark Druskoff

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