GSR II Meteora Acquisition: Bitcoin Depot May Acquire Bitcoin ATM Operators After Public Debut, Says CEO – Form 8-K

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Bitcoin Depot May Acquire Bitcoin ATM Operators After Public Debut, CEO Says

7:34 a.m. CST, January 24, 2023

Lux Vending, a Bitcoin ATM operator and fintech company doing business as Bitcoin Depot, plans to make acquisitions as it seeks to expand globally after its public debut, said founder and CEO Brandon Mintz.

Atlanta-based company expects mid-February closing of its merger with blank check company GSR II Meteora Acquisition [NASDAQ:GSRM]. He doesn’t expect to sign any letters of intent before that deal closes, Mintz said.

Bitcoin Depot will likely target a Bitcoin ATM operator first, according to Mintz. It could also seek to acquire a technology provider that facilitates the purchase of Bitcoin at retail checkouts or another software provider for Bitcoin ATMs, the CEO said. Last year, the company acquired software provider Bitaccess, eliminating a huge expense for the company, he explained.

He doesn’t have a sweet spot in target size and could be looking at buying $500,000 from a small Bitcoin ATM operator or over $100 million for larger operators, Mintz said.

The SPAC merger will result in approximately $170 million in cash, assuming there are no buyouts. However, the average reimbursement rate in 4Q22 was around 87%, the highest quarter on record, according to Dealogic data.

As Bitcoin Depot prepares for a medium case scenario, it expects redemptions to be below average given its financial profile and sponsor team, Mintz said.

Revenue for the first nine months of 2022 increased 25.3% year-over-year to $497.2 million, according to the company’s latest earnings report. Net income fell to $4.6 million from $9.6 million a year earlier, partly due to a sharp increase in interest expense.

Bitcoin Depot, which was founded in 2016, has around 7,000 ATMs in North America. It operates in 48 states – excluding New York and Hawaii – as well as in all Canadian provinces. The company applied for a BitLicense to operate in New York in late 2020 and believes it is in the final stages of that process, Mintz said.

With only one licensed operator and fewer than 200 Bitcoin ATMs in New York, the state is underserved and represents a strong growth opportunity when Bitcoin Depot can begin operating there, according to Mintz. He compared New York to Florida, which is similar in population size and has over 3,100 Bitcoin ATMs and dozens of operators.

Although it has not announced any expansion plans beyond the United States and Canada, Bitcoin Depot plans to launch internationally within the next two years. Since it could do so through an acquisition, a specific timeline is difficult to provide, Mintz said.

The company is growing through retail partnerships like the one it has with Circle K. Bitcoin Depot is present in nearly 2,000 of Circle K’s 10,000 outlets in the United States and Canada. The convenience store has 5,000 additional locations outside of North America, Mintz noted when considering possible international expansion.

Bitcoin Depot announced today that it signed 440 new outlets in the second half of 2022 through partnerships with convenience brands such as FastLane, Gas Express, and High’s.

It typically partners with convenience stores and grocery stores, though it does have malls and other retail outlets, Mintz said. Ideal partners have the physical space in their store for a kiosk, are not in a rural setting, and believe having a Bitcoin ATM will help drive foot traffic to their store, he added. .

The company pays the retailer a fixed monthly rent regardless of performance and provides a perk for performance, he explained.

It has between 110 and 125 employees.

Kirkland & Ellis provided legal services to Bitcoin Depot during the SPAC merger. Oppenheimer was GSR’s financial advisor and Latham & Watkins was its attorney. KPMG is the auditor of Bitcoin Depot.

by Rachel Stone in Charlottesville, Virginia

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