Blog Coverage Private Equity Firm Apollo Global Management Acquires Outerwall

LONDON, UK / ACCESSWIRE / July 26, 2016 / Active Wall St. blog coverage looks at the headline from Apollo Global Management LLC (NYSE: APO) as the company, on July 25, 2016, acquired Outerwall Inc. (NASDAQ: OUTR), owner of brand Redbox, which is in the DVD gaming and movie kiosks business. Shareholders of Outerwall will get $52 per share in cash, a premium of 51% of Outerwall’s March 14, 2016, closing price. The entire deal is valued at approximately $1.6 billion including debt. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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Transaction details

The arrangement gives Outerwall a way to restructure its business under Apollo Global Management’s direction after a three-year revenue slump has led the former’s share price to spiral down over past year. In recent years, Outerwall’s business, which has over 40,000 Redbox kiosks operating in grocery and convenience stores across the U.S., has been affected by consumers opting for direct on demand movies from cable operators or streaming content via online providers. The company’s plummeting stock prices and declining revenue led to a major churn in top management. At this point activist investor Engaged Capital LLC acquired 14% stake and added three directors to the board in April 2016 setting stage for the company be sold. After four months of contemplation, the deal with Apollo Global Management was finalized.

A statement by Erik E. Prusch, Outerwall’s CEO read, “Apollo is an ideal partner to support Outerwall’s efforts to continue serving our millions of loyal customers and dedicated retail partners through our unrivaled network of kiosks and automated retail offerings. We look forward to working closely with Apollo as we continue to strengthen our businesses and execute on our strategic plan.”

“We are extremely excited for our funds to acquire Outerwall,” said David Sambur, a partner at Apollo Global Management. “Outerwall is a dynamic customer-focused business that delivers superior kiosk experiences that delight consumers and generate value for its retailer partners. We look forward to working with Outerwall’s talented and dedicated team to continue the business’s strong heritage of growth and innovation.”

Once all closing conditions are met with and regulatory approvals are confirmed the deal is likely to be finalized by Q32016. After this, Outerwall’s shares will be listed off all public markets and will become a privately held company.

Market gives thumbs up to the deal

The markets responded favorably to the news of takeover and share prices of Outerwall spiked 11.26% closing yesterday’s trading session at $52.19. The company declared a quarterly dividend of $0.60 per share on July 24, 2016, which will be paid to shareholders by September 6, 2016. Outerwall plans to release its Q2 earnings for the current year on July 28, 2016, however, it does not intend to hold a conference to discuss the earnings. Outerwall’s shares are up 46.12% on a year to date basis.

Apollo Global Management’s shares declined marginally by 0.36% closing the day at $16.49. The stock gained 12.54% since the beginning of 2016.

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