Montreal s GardaWorld wins 12-year Bank of America contract
|Montreal Gazette 18 Dec 2013 at 16:49|
GardaWorld cash-vault tellers Matthue Vo and Flerida Abreau work at the company’s branch in Needham, Mass. Montreal-based GardaWorld has signed a 12-year agreement to manage Bank of America’s cash-processing and cheque-imaging services in 32 locations across the United States.
Photograph by: GardaWorld
MONTREAL — GardaWorld has scored a major contract in the United States as Bank of America agreed to outsource its cash-vault operations in 32 locations.
GardaWorld said it will acquire Bank of America’s money rooms and related facilities as part of the deal that will generate $1.4 billion in revenue over 12 years.
The Montreal company, which will count, sort and store cash, process cheques and keep branches and ATMs supplied for the bank, declined to say how much it will invest.
The deal more than doubles GardaWorld’s existing cash-processing business, which handles more than $5 billion US a day in currency for 12,000 U.S. clients, including financial institutions and retailers.
About 1,000 of the bank’s employees will join GardaWorld Cash Services when the deal is completed in the first quarter of 2014.
“GardaWorld is uniquely positioned to be a partner of choice to financial services clients in North America,” said Christopher Jamroz, cash services president and chief operating officer.
Chief executive Stephan Cretier said outsourcing is new in the United States, but the trend is more common in other countries.
“This transaction demonstrates the options available to U.S. banks in terms of how they think about processing cash.”
GardaWorld said its operations allow financial institutions to lower operating expenses, sell real estate and use a single nationwide cash-processing technology.
The bank said the contract for its remaining cash-vault operations is part of its efforts to “simplify” the company.
“This agreement ensures our cash-vault clients will continue to receive the highest level of service,” spokesman Mark Pipitone wrote in an email.
Raymond James analyst Daniel Marchon wasn’t surprised by Bank of America’s move given its efforts announced a few years ago to save $8 billion US a year through various initiatives.
“I think it’s the combination of cutting costs and trying to optimize technology that really drove this,” he said.
Marchon said GardaWorld appears to have a competitive advantage in lowering operating expenses of the bank’s branches.
In August, GardaWorld announced a deal to acquire G4S Cash Solutions (Canada) for $110 million.
The company was taken private a year ago by a consortium formed by the CEO of the cash logistics and security company and private equity firm Apax Partners.
Garda provides security, cash logistics and armoured truck services, and airport screening in Canada, and protects embassies and oil and gas workers in dangerous areas like the Middle East. It has 45,000 employees and has clients in North America, Europe, Latin America, Africa, Asia and the Middle East.