Outerwall (NASDAQ:OUTR), formerly Coinstar, began trading under its new ticker symbol today, with Outerwall's management team ringing the morning bell on Nasdaq. The company also announced an acquisition of a company that created automated self-serve kiosk system to purchase used mobile phones, tablets and MP3 players for cash.
In a press release, Outerwall explained the name change, saying that over time, it has evolved from being just the Coinstar business, to becoming "an umbrella corporate brand that encompasses the company's current operations and provides a platform for future automated retail opportunities." Outerwall is also a term that can refer to the fact that most of the company's coin counting and movie kiosks are located on what it refers to as a store's fourth wall, which is typically at the front of the store and underutilized by many retailers.
Outerwall also announced today that it has bought 100% control of automated cell phone, tablet, and MP3 player recycler ecoATM, which sets up kiosks where people trade their used devices in for cash. Outerwall values the transaction at $350 million, but because it already owned 23% of the company, its actual cost is closer to $270 million.
The company says 175 million new mobile devices are sold annually in the United States and that only 20% of used mobile phones are collected, with more than 50% being discarded or stored, "representing a significant market opportunity."
Outerwall CFO Galen C. Smith said he expects ecoATM "to be accretive to Outerwall's EPS in 2014 and to yield a positive return on invested capital in the coming years." The transaction is expected to close in the third quarter.
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