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Redbox Owner Expected to Go Private Sept. 27

26 Sep, 2016 By: Erik Gruenwedel

On the heels of Apollo Management’s Sept. 23 announcement that 69.3% of outstanding Outerwall common stock had been tendered (19.3% above the required minimum 50%), the kiosk manufacturer’s stock is expected to cease trading Sept. 27, according to Eric Wold, analyst with B. Riley & Co.

Apollo in July announced it was acquiring Outerwall, including Redbox — the nation’s largest video rental service — for $1.6 billion. The deal enables Outerwall to distance itself from Wall Street pressure as it continues to generate revenue from Redbox, while at the same time diversifying into other kiosk-related businesses beyond the Coinstar coin-changing subsidiary.

In a note announcing his discontinuing coverage of Outerwall, Wold said upside results by both Redbox and ecoATM underscored Apollo’s “smart decision” to announce the acquisition prior to the release of Q2 financial results.

Indeed, Redbox saw Q2 profit drop 19% to $82.1 million on revenue of $389.1 million. That compared to income of $98.9 million on revenue of $439 million during the previous-year period.

The rental service rented 123.6 million discs, compared with 146 million in the prior-year period.

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