To acquire GAM’s rights and 44.4% voting interests in Redbox
Coinstar has announced its intent to purchase the remaining stake of Redbox Automated Retail, an automated DVD rental service, from GetAMovie and other minority interest holders.
Coinstar has agreed to acquire GetAMovie’s (GAM’s) 44.4% voting interests in Redbox and GAM’s rights, title and interest in a $10 million promissory note made by Redbox, in exchange for a combination of cash and Coinstar common stock.
Coinstar will initially pay GAM $10 million in cash and 1.5 million shares of Coinstar common stock on the closing date, which is expected to be on February 26, 2009. In addition, Coinstar will pay deferred consideration to GAM that will be payable in cash and/or shares of Coinstar common stock at Coinstar’s election and subject to the satisfaction of certain conditions.
In addition, Coinstar is expected to purchase the remaining outstanding interests of Redbox from minority interest and non-voting interest holders in redbox. Consideration will be paid on similar terms to those of the GAM purchase agreement. The total consideration to be paid in these transactions is expected to be between $21.5 million and $24.9 million. Upon closing these transactions, Coinstar is expected to own 100% of Redbox.
Gregg Kaplan, CEO of Redbox, said: Redbox has a very positive and cooperative relationship with Coinstar and we’re pleased with this announcement. 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.