Outerwall, the owner of Redbox video rental kiosks and Coinstar machines, is going private in a $1.6 billion deal. Bobbi Rebell reports.
Outerwall, the owner of Redbox video rental kiosks and Coinstar machines, is cashing out- agreeing to be taken private by affiliates of Apollo Global Management. The deal is worth about $1.6 billion, or $52 cash per share. Larry Berlin covers the stock at First Analysis. (SOUNDBITE) LAWRENCE BERLIN, VICE PRESIDENT, FIRST ANALYSIS (ENGLISH) SAYING: "For the shareholders, it's great, because it gives them a return on their investment . Number two, for the company, it is a cash cow, but it isn't one that's gonna grow, and shareholders prefer something that's gonna grow." Outerwall shares soared on the news. The deal comes about four months after Outerwall, under pressure from activist investor Engaged Capital which is Outerwall's second-largest shareholder, said it would explore strategic and financial alternatives. The company gets most of its revenue from Redbox. It also has a phone recycling business, called ecoATM, that Engaged Capital had urged it to sell or shut down.