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Bancsource, Inc. (or the “Company”) provides outsourced maintenance services and sales of cash cycle equipment including ATMs, smart safes, scanners, and other equipment for financial institutions and retailers nationwide. At the time of the transaction, Bancsource was the third-largest service provider in this sector, and the largest independent player. The Company was privately-held and is headquartered in Republic, MO, with additional key offices in Chicago, IL, and Nashville, TN.

Transaction Summary

Brookwood Associates advised Bancsource on its sale to CapitalWorks, LLC a Cleveland, OH based private equity investor. CapitalWorks teamed with three industry-experienced executives as co-investors, including the former CEO of Diebold (the second-largest service provider in the space).

Transaction Highlights

The Situation – The Company was purchased in 1999 by two individual investors with experience in the outsourced banking services industry. Over the life of the investment, Bancsource underwent significant transitions from an item-processing (“IP”) equipment servicer, to an bank equipment servicer, and finally to a diversified equipment servicer. The majority Shareholders of the Company were seeking an exit to realize upon their investment and a new partner to lead the next phase of growth in this consolidating industry.

Brookwood’s Role – Brookwood executed a marketing process designed to address three major investor considerations: (i) disparate market views on “cash;” (ii) growth in the newer smart safe product category; and (iii) the continuing transition from legacy IP business. Brookwood successfully positioned the Company as a platform for further service and sales growth both in and outside of the cash cycle equipment sector.

The Result – The thorough marketing process generated both financial and strategic buyer interest, allowing Shareholders and Management to compare various transaction alternatives. Ultimately, Shareholders and Management chose a transaction with CapitalWorks that provided: (i) liquidity to Shareholders and existing Debtholders and (ii) a new owner committed to fueling significant additional growth. CapitalWorks had preexisting industry understanding through an LP and an operating partner, and teamed with the former CEO of Diebold (NYSE:DBD) to pursue this investment.

Press Release Excerpt

We are pleased to announce that Brookwood Associates served as the exclusive financial advisor to privately-held Bancsource, Inc. on its sale of a majority ownership position to CapitalWorks, LLC. Bancsource provides maintenance services and sales of cash cycle equipment including ATMs, smart safes, scanners, and other equipment for financial institutions and retailers nationwide.

This transaction extends Brookwood’s successful track record advising: (i) privately-held businesses in strategic transactions and (ii) outsourced services businesses. Brookwood’s strong sector knowledge and process management skills were instrumental in generating a successful outcome for both the Company and its shareholders. The outsourced services sector continues to attract strong interest from both private equity investors and strategic acquirers, and Brookwood can add significant value in these transactions.

About Bancsource, Inc.: Bancsource (www.bancsourceinc.com) is a leading independent provider of outsourced, recurring maintenance services, and equipment sales primarily to operators of a range of equipment involved generally in cash cycle management. Based near Springfield, Missouri, the Company services ATMs; traditional and branch-based bank equipment; financial and non-financial item processing and imaging equipment; and smart safes on a national basis. Over 80% of service revenue is provided under automatically-renewing pre-paid service contracts.

About CapitalWorks: CapitalWorks (www.capitalworks.net) is a Midwestern and family-focused private equity firm that encourages knowledgeable investors to partner with it in finding, vetting, and owning companies. Based in Cleveland, Ohio, CapitalWorks acquires lower middle-market companies in the manufacturing, aerospace, and financial industries and gives them the capital, support, and freedom to grow.

About Brookwood Associates: Brookwood Associates (www.brookwoodassociates.com) was founded in 1989 and is one of the largest independently owned middle-market investment banking firms. Our team of senior-level professionals is one of the most experienced in the industry. The firm offers merger, acquisition, corporate financing, restructuring, fairness opinion, and other related advisory services to clients across several industries.