Redbox and Coinstar maker Outerwall agrees to $1.6B buyout from private equity firm
Outerwall, the Bellevue-based operator of Redbox movie rental kiosks and Coinstar coin counting machines, today announced that it has entered into a deal to be acquired by Apollo Global Management for $52 per share in cash.
Context & Ripple Effects
Outerwall spent 2015 repositioning around its kiosk cash cows: it bought trade-in site Gazelle for $18M (after Gazelle raised over $50M) and replaced Redbox President Mark Horak as the DVD business kept shrinking (a leadership change that sent the stock diving). The Apollo deal is the endgame of that arc — taking the Bellevue company private at $52/share rather than continuing to manage a declining disc-rental business under public-market scrutiny.
What makes this worth tracking backward is how the asset fared after Apollo: Redbox was spun out via SPAC at a $693M valuation, sold again to Chicken Soup for the Soul Entertainment in an all-stock deal that loaded on $325M of debt, and ultimately landed in bankruptcy protection — a full round trip from a $1.6B take-private.
First-order effects
- Outerwall shareholders receive $52 per share in cash, ending public trading for the owner of Redbox, Coinstar and ecoATM, while Apollo gains control of the kiosks' steady coin-counting and rental revenue without quarterly earnings pressure.
Second-order effects
- Apollo's later moves show the harvest playbook applied elsewhere: it took Redbox public via SPAC at a valuation far below the $1.6B it paid for the whole company, and separately bought AOL from Verizon before reportedly selling it to Bending Spoons for roughly $1.5B — buying declining consumer-tech assets, extracting value, and reselling the pieces.
Third-order effects
- Redbox's eventual Chapter 7 liquidation under Chicken Soup — which had taken on $325M in debt to acquire it — illustrates where leveraged ownership of a structurally shrinking physical-media business ends: private equity can time an exit, but the underlying decline just changes hands until someone absorbs the loss.
The trend: Private equity firms are increasingly the buyers of last resort for cash-generating but declining consumer-hardware businesses, spinning off or reselling assets as the core market erodes.