Coinstar Sells Inactive Blockbuster Express Kiosks for $17.9 Million11 Jun, 2013 By: Erik Gruenwedel, Chris Tribbey
Coinstar has quietly sold an undisclosed number of inactive Blockbuster Express kiosks to third-party vendors for $17.9 million, according to a regulatory filing.
Coinstar, which owns and operates Redbox and Redbox Instant by Verizon, acquired more than 10,000 Blockbuster Express kiosks from NCR Corp. for $100 million in July 2012. During the past year, Coinstar has either replaced those remaining 6,200 Blockbuster Express kiosks with Redbox units or un-installed them and left those locations altogether.
Eric Wold, analyst with B. Riley & Co. in Los Angeles, said the transaction represented a quick sale with minimal long-term competitive risk. With each un-installation, Coinstar depreciated the kiosk bringing the cost of the unit to zero with no impact on Coinstar’s fiscal balance sheet.
“While there was a potential opportunity to license those kiosks to third parties within non-competitive markets within a revenue-sharing agreement, we believe [the sale] was the less risky and easier decision for management to make,” Wold wrote in a June 11 note.