Coinstar Inc. has been rebranded as Outerwall Inc. Outerwall has acquired ecoATM for $350 million in cash. This amount includes a payoff of indebtedness and transactions costs. The acquisition is subject to adjustment for working capital. Outerwall already owns 23% ownership in ecoATM. The consideration for the stake will be deducted from the actual cash paid. Once the transaction is closed, Outerwall will own 100% of ecoATM.
ecoATM is known for being the first company to create an automated self-serve kiosk system to purchased used tablets, MP3 players, and mobile phones for cash. The kiosks use advanced machine vision, artificial intelligence, and electronic diagnostics to evaluate the electronics.
“With ecoATM, Outerwall will advance its evolution into multiple automated retail businesses and increase our exposure to the growing demand for refurbished products and mobile devices across the globe,” stated Outerwall CEO J. Scott Di Valerio. “As evidenced by our growing investment in ecoATM over the last four years, we are confident that ecoATM’s innovative, environmentally minded business model will continue to resonate with today’s technology savvy consumers.”
ecoATM is able to capitalize on the growing U.S. mobile device market where 175 million new devices are sold per year. Only twenty-percent of used mobile phones are connected with over 50% being discarded or stored. The demand for refurbished mobile phones are continuing to accelerate as well. This presents a solid market opportunity.
This transaction is expected to close in Q3 2013. It is also subject to regulatory approvals. Morgan Stanley acted as Outerwall’s financial advisor and Perkins Coie LLP worked as Outerwall’s legal counsel.