Redbox Owner To Be Taken Over By Apollo In $1.6 Billion Deal; Outerwall Will Go Private

by Emily Jed and Nick Montano
Posted On: 7/25/2016

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TAGS: Outerwall Inc, Apollo Global Management LLC, Outerwall outstanding shares, Redbox, Coinstar, ecoATM recycling, vending, David Sambur, Outerwall acquisition

Outerwall, vending BELLEVUE, WA -- Outerwall Inc. said funds managed by affiliates of Apollo Global Management LLC, a New York City-based private-equity firm, will acquire all of the outstanding shares of its common stock for $52 per share in cash. The transaction, unanimously approved by Outerwall's board of directors, has an enterprise value of $1.6 billion, including net debt.

The purchase price represents a premium of about 51% over Outerwall's closing stock price on March 14. That was just prior to the announcement that the manufacturer and operator of Redbox DVD rental, Coinstar coin-counting and ecoATM recycling machines said it had begun to "explore strategic and financial alternatives to maximize shareholder value."

Outerwall, while doing business as Coinstar Inc., sold its bulk vending and coin-op amusement assets in 2009.

Apollo Global Management purchased Hostess Brands out of bankruptcy in 2013 and acquired the Chuck E. Cheese's family entertainment center chain in 2014.

"We are extremely excited for our funds to acquire Outerwall," said David Sambur, a partner at Apollo. "Outerwall is a dynamic customer-focused business that delivers superior kiosk experiences that delight consumers and generate value for its retailer partners. We look forward to working with Outerwall's talented and dedicated team to continue the business's strong heritage of growth and innovation."

The transaction will be completed through an all-cash tender offer. It is expected to close in the third quarter of 2016. Following the closing, Outerwall will become a privately held company and its common shares will no longer be listed on any public market.

Financing is being provided by Bank of America Merrill Lynch, Jefferies Finance LLC, Barclays and Credit Suisse.

Outerwall plans to release its second quarter earnings after the market close on July 28. Separately, on July 24, the Outerwall board of directors declared a quarterly dividend of 60¢ per common stock share. The dividend is expected to be paid on Sept. 6 to stockholders of record at the close of business on Aug. 23.