CALGARY, Alberta — DirectCash Income Fund grossed CAN$50 million (U.S.$40.6) after completing its initial public offering of trust units, which included the issuance of 5 million trust units at CAN$10 (U.S.$8.13), according to a news release.
The Fund used the proceeds of the offering to acquire a 40.1 percent interest in DirectCash Limited Partnership, which in turn acquired an ATM, Interac debit terminal and prepaid cash-card business, formerly operated by Teal Financial (2003) Corp. and Card Capital Inc. The remaining 59.9 percent interest in DirectCash Limited Partnership is held indirectly by Teal’s and Card Capital’s current shareholders.
The Fund is now the largest branded non-financial institution ATM provider in Canada, with 3,538 ATMs operating under the trade name DirectCash ATM, the release noted. The Fund also is one of the leading providers of branded non-financial-institution debit terminals and prepaid cash cards, having revenues of $32.5 million and normalized earnings before interest, taxes, depreciation and amortization (EBITDA) of $12.6 million for the 12-month period ended Sept. 30.
The Fund intends to make monthly distributions of its distributable cash, estimated at CAN 95 cents (U.S. 77 cents) per trust unit annually.
The underwriting syndicate was led by BMO Nesbitt Burns Inc. and included National Bank Financial Inc., RBC Dominion Securities Inc., Scotia Capital Inc. and First Associates Investments Inc. The Fund has granted the underwriters an option to purchase up to an additional 612,200 trust units at the offering price at anytime on or prior to Jan. 13 to cover over-allotments, if any, and for market stabilization purposes.
