Redbox DVD Kiosk Company Bought For About $176 Million By Coinstar
You’ve seen the Redbox DVD rental vending machines in grocery stores and in several McDonald’s restaurants around the U.S. The company behind those machines has been acquired by Coinstar through a stock and cash deal. Coinstar is a publicly traded company whose core product is a machine that takes all of your change, counts it and gives a certain amount of cash back after taking a commission. Coinstar will be paying $10 million in cash and 1.5 million in shares of common stock to GetAMovie Inc., a McDonald’s affiliate. Redbox will also buy the remaining interest from minority owners in GetAMovie for between $21.5 million and $25 million. Coinstar will also be paying other investors in GetAMovie Inc. The whole deal is estimated to be about $176 million.
Redbox has machines in about 12,000 locations of grocery stores, pharmacies, and McDonald’s restaurants. The concept is that you rent movies from the machine for $1 per night. Redbox filed for an IPO in May 2008, but decided not to move forward with it due to economic conditions. To make matters worse, Universal Studios threatened to not provide movies to Redbox anymore if they continued to let them be rented for such a low price. Redbox has about 35 million unique customers.
“Redbox has a very positive and cooperative relationship with Coinstar and we’re pleased with today’s announcement,” stated Gregg Kaplan, CEO of Redbox. “The growth of the self-service DVD rental market continues to be brisk, and the combination of $1 per night pricing and the extreme convenience offered by redbox continues to be enthusiastically embraced by consumers.”This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry