Automated retail company Outerwall, formerly Coinstar, has announced it will acquire kiosk-based electronic buy-back company ecoATM for $350 million in cash.
Outerwall, which owned 23 percent of ecoATM, now takes charge of 100 percent of the San Diego, California, startup. The merger is expected to close in the third quarter of 2013 and will be accretive to EPS in 2014.
The merger was praised by Tom Tullie, chief executive officer of ecoATM: “We look forward to benefitting from Outerwall’s resources and expertise to accelerate ecoATM’s roll out and bring our innovative solutions to consumers nationwide.”
The ecoATM concept aims to bring simplicity and cash incentives into the consumer electronics recycling space. Customers bring their used mobile phones, MP3 players and tablets to any operating ecoATM, which then receives, identifies and estimates the value of the device through an automated sensory system. Customers are paid in cash and the product is either resold or recycled by the company.
According to ecoATM’s director of marketing and communications, Ryan Kuder, there are more than 600 ecoATM kiosks in 40 states nationwide, with four to five new locations being launched each day on average. In April, the company redeemed its 1 millionth electronic device and a spokesperson tells E-Scrap News it hopes “to someday have an ecoATM within 5 miles of 95 percent of the U.S. population.”
The buy-back service has come under scrutiny in recent months as electronics thieves have attempted to cash-in on stolen mobile devices using ecoATMs. Increased security measures, which include taking fingerprints and requiring customers to provide photo identification, have sought to dissuade thieves from abusing the service and, in some cases, have led directly to arrests.
The ecoATM brand will join Outerwall’s other automated retail services, including Redbox movie rentals, Coinstar money services and Rubi coffee kiosks. The ecoATM headquarters will remain in San Diego.