By : Chris Tribbey | Posted: 12 Feb 2009
Coinstar Inc. announced Feb. 12 that it will buy McDonald’s interest in DVD rental kiosk operator Redbox for as much as $151 million in cash and stock by the end of February.
The deal includes 1.5 million shares of stock in Coinstar and $10 million in cash to McDonald’s affiliate GetAMovie Inc. Coinstar also announced it would seek to buy the remaining minority interests in Redbox from other interest holders for $21.5 million to $24.9 million.
McDonald’s currently has about a 44% stake in Redbox.
“Redbox has been a great addition to our … product portfolio, and we are very enthusiastic about the DVD rental kiosk market having seen tremendous growth and acceptance over the past few years,” said Coinstar COO Paul Davis. “Redbox has a strong business model and management team, and we look forward to seeing continued growth as a combined company.”
Redbox CEO Gregg Kaplan added: “Redbox has a very positive and cooperative relationship with Coinstar, and we’re pleased with today’s 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.”