COPPELL, Texas, May 31, 2018 (GLOBE NEWSWIRE) -- The Brink’s Company (NYSE:BCO), a global leader in total cash management, secure logistics and payment solutions, today announced it has agreed to purchase Dunbar Armored, Inc., the fourth largest U.S. cash management company, for approximately $520 million in cash. The transaction will be funded from the company’s available cash and is expected to close by the end of 2018, subject to customary closing conditions and regulatory approval.
Based in Hunt Valley, Maryland, Dunbar employs approximately 5,400 people, operates 78 branches throughout the U.S. and has more than 1,600 armored trucks in its fleet. Over the last 12 months, the privately-held company generated revenue of approximately $390 million and adjusted EBITDA of approximately $43 million. The acquisition will expand and differentiate Brink’s customer base with Dunbar’s complementary focus on small-to-medium sized retailers and financial institutions.
Doug Pertz, Brink’s president and chief executive officer, said: “Dunbar and its employees have built an excellent reputation and a loyal customer base over the last 95 years under generations of family leadership. The combination of our two companies, each with an impressive heritage, forms a solid foundation for future success. We plan to integrate Dunbar’s strong management, experienced personnel and efficient use of assets to accelerate operational excellence and continued margin growth in our U.S. operations.”
Kevin Dunbar, chief executive officer of Dunbar Armored, said: “My father started this business and grew it through his hard work and ability to attract and retain great employees and loyal customers. He entrusted me to continue to grow the business to levels that we never thought could be reached, and the level of care with which we have built the Dunbar brand and business is one of our greatest sources of pride. We are delighted with the Brink’s transaction and are confident that Brink’s will continue the Dunbar successes. At the end of the day, our business is all about our great employees and loyal customers, and we are ready to entrust Brink’s with both.”
Brink’s expects the combined entity to achieve substantial cost and operational synergies driven by improved route density, branch optimization and administrative efficiencies. In addition, Brink’s expects to invest approximately $50 million in capital expenditures over three years to support branch rationalization and the integration of Dunbar’s fleet. The combination of Dunbar and Brink’s U.S. operations is expected to yield annual cost synergies of $40 million to $45 million, resulting in a post-integration adjusted EBITDA multiple between 6.5 and 7 times, including the incremental capital investment. Full integration and synergies are expected to be achieved over three years, with the majority achieved by the end of the second year.
Brink’s expects the acquisition to be accretive to non-GAAP earnings in 2019 and to increase annual non-GAAP earnings by approximately 90 cents per share within two years. The transaction is expected to facilitate utilization of the company’s existing tax attributes and reduce its non-GAAP effective tax rate by 100 to 200 basis points in the first full year after the acquisition. Combined with other actions, Brink’s expects to reduce its effective tax rate by 400 to 600 basis points over the next several years. Brink’s does not expect to pay U.S. federal cash taxes for at least six years due to utilization of its existing tax attributes and the benefit of an IRC 338(h)(10) election on this transaction.
Pertz added: “This transaction is the most significant demonstration to date of our strategy to accelerate profitable growth by making core acquisitions in our existing geographic markets. Upon closing the Dunbar acquisition and the previously announced acquisition of Rodoban in Brazil, the ‘excess’ cash on our balance sheet will be fully deployed to generate strong returns, and we’ll still have most of our $1 billion revolver available for additional investments. In addition, we will have invested more than 85 percent of the $800 million we targeted for accretive core acquisitions during 2018 and 2019.”
Guidance
The company’s 2018 non-GAAP operating profit guidance of $365 million to $385 million, initially disclosed in February and affirmed on April 25, is based on currency rates as of year-end 2017 (constant currency), with the exception of the Argentine peso. Brink’s expects the year-to-date decline in the peso, and potential further declines, to be fully offset in 2018 by inflation-driven price increases and organic growth, which has been the case over the last five years.
The translation impact of currencies other than the Argentine peso, assuming current exchange rates through the end of 2018, is estimated to be approximately 2% negative. Notably, organic growth of revenue and profits in local currency continues to meet or exceed management’s expectations, as do the integration efforts and synergy capture from completed acquisitions. Brink’s will update its April 25 guidance when it reports second-quarter earnings in July.
Brink’s increased its 2019 target for adjusted EBITDA from $625 million to $685 million, which assumes the Dunbar acquisition is completed by the end of 2018 and that partial cost synergies will be achieved in 2019.
BofA Merrill Lynch is serving as financial adviser and Troutman Sanders LLP is acting as legal adviser to Brink’s in the transaction. Bengur Bryan is serving as financial adviser and DLA Piper is serving as legal adviser to Dunbar.
About The Brink’s Company
The Brink’s Company (NYSE:BCO) is the world leader in total cash management and secure logistics including cash-in-transit, ATM services, vault outsourcing, money processing, intelligent safe services, international transportation of valuables, and payment services. Our customers include financial institutions, retailers, government agencies, mints, jewelers and other commercial operations. Our global network of operations in 41 countries serve customers in more than 100 countries. For more information, please visit our website at www.Brinks.com.
About Dunbar Armored, Inc.
Dunbar Armored, Inc. is a family owned provider of cash management and secure logistics throughout the United States, including cash-in-transit, ATM services, vault outsourcing, money processing, and intelligent safe services. For nearly one hundred years, Dunbar’s mantra has been Loyalty + Protection for our with range of financial, commercial and government customers. For more information, please visit our website at www.dunbararmored.com.
