02.07.2013 19:56:00

Coinstar, Inc. -- Moody's says Outerwall's (formerly Coinstar) acquisition of ecoATM is a credit positive use of cash and cash flow

New York, July 02, 2013 -- Moody's Investors Service said that Outerwall Inc.'s ('Outerwall', formerly Coinstar, Inc., Ba2 Corporate Family Rating) acquisition of the remaining 77% stake in ecoATM that it does not already own, is a good use of its cash from a credit perspective. We expect the valuation of $350 million (which includes the payoff of debt at ecoATM) for the purchase less Outerwall's 23% stake will be financed with cash on hand and borrowings under its $450 million revolving credit facility. The company had over $500 million in cash and short term investments as of 3/31/13, following its new debt financing of $350 million and partial repayment of its convertible notes in the March quarter. We expect the company will repay any revolver borrowings for the transaction by the end of the year. We also expect the company to generate sufficient cash flow and maintain solid liquidity to fund the conversion or repayment of its convertible notes due September 2014 ($140.4 million outstanding at 3/31/13) as well as to complete its target of $100 million in share repurchases annually.

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