E*Trade Sells Its ATM Network to Cardtronics for $106 Million

E*Trade Financial Corp. today announced it agreed to sell its ATM network to Cardtronics Inc., an ATM deployer based in Houston, for $106 million in cash. E*Trade, a New York-based online banking and brokerage company, operates a network of 15,000 ATMs in an operating unit called E*Trade Access Inc. The company indicated last month it was looking for a buyer for the unit. The acquisition will more than double Cardtronics' network of machines, which currently stands at more than 12,000 in convenience stores, groceries, gas stations, and pharmacies in all 50 states, making it the largest non-bank ATM operator. The deal also includes a licensing agreement under which E*Trade will continue to keep its brand name on some or all of the ATMs it is selling. In addition, E*Trade plans to continue a policy of refunding ATM fees its cardholders incur at any ATM. Such policies and agreements, says an E*Trade spokesperson, rendered ownership of ATM network less important to the company. “We didn't feel it was necessary for us to operate an ATM network as long as it was possible for our customers to access ATMs,” she says. The company says it is also looking into taking deposits at its financial centers as well as directly from homes and businesses. “Check truncation legislation is changing how companies look at deposit taking,” said Arlen W. Gelbard, president of E*Trade Bank, in a statement. “Our goal is to provide our customers with deposit-taking capabilities that surpass traditional standards for convenience and speed.” E*Trade says it will record a $55 million pre-tax gain on the sale upon its close, which the company expects within 60 days. E*Trade built its ATM network over the past four years via acquisitions, the most recent of which, two years ago, was of a system called Extra Cash and brought 4,000 machines into the network.