Coinstar to Acquire GroupEx Financial Corporation.
Transaction Will Strengthen Company's Existing Money Transfer Business Adding U.S. to Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. Corridor
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CSTR Combat System Trial Rehearsal (US DoD) ), the leader in 4th Wall([TM]) services at the retail front end, today announced that its subsidiary Coinstar E-Payment Services Inc. has signed a definitive agreement to purchase GroupEx Financial Corporation ("GFC GFC Geelong Football Club (Australia)
GFC GMD (Ground-Based Midcourse Defense) Fire Control
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GFC Grace Fellowship Church
GFC Gaelic Football Club "). GFC is a leading independent provider of electronic money transfer services between the U.S. and Latin America, currently operating a network with approximately 1,650 send agents in 23 states servicing 13 countries. Upon closing of the transaction, which is expected as soon as all regulatory approvals are obtained, the Coinstar Money Transfer ("CMT CMT Certified Medical Transcriptionist.
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The purchase includes a $60 million cash payment upon closing, at which time Coinstar will receive the cash on GroupEx's balance sheet, which is expected to be approximately $12 million although the exact amount will not be known until that time. In addition, there is a contingent payment of up to $10 million within 15 months of closing if certain performance hurdles are met. This is expected to produce a net purchase price of between $48 million to $58 million before cost savings or synergies; however, the exact net amount will not be known until closing.
GFC, based in La Mirada La Mirada (lä mĭrä`də), city (1990 pop. 40,452), Los Angeles co., S Calif.; inc. 1960. La Mirada derives from the Spanish for "the view," referring to the panoramic view of the surrounding valleys from atop the city's hills. , CA., is privately owned and is the successor to a business established in 1987 as a Latin American courier service. The business has since evolved, currently offering a product suite that offers a one-stop shopping experience for consumers. Primarily, GFC offers electronic money transfer and money orders. GFC has gained significant market share in the global money transfer business, with key points of differentiation including its leadership in the U.S. to Latin American market. In this corridor, GFC leverages its proprietary home delivery network to Mexico and Guatemala, offering its own money order product through a state-of-the-art payment technology platform and compliance infrastructure, and marketing its recognized money transfer brands. These attributes are recognized by existing and prospective partners (agents/payers/other strategic partners) and are responsible for GFC's momentum in signing up new agents and growing its electronic remittance volume. GFC has achieved a 240% CAGR CAGR
See: Compound Annual Growth Rate in electronic transfers from 2004 through 2006.
As of June 30, 2007, GFC employed approximately 375 people. Its primary send market is the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , which is the largest send market in the world accounting for approximately 23% of worldwide money transfer industry transactions. GFC's total revenue for 2006 was approximately $62 million with EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of approximately $7 million (see Appendix A.).
"Our acquisition of Travelex Money Transfer in 2006 included a broad, international infrastructure. The GroupEx transaction is a strategic, tuck-in acquisition Tuck-In Acquisition
The acquisition of a company made for the sole purpose of merging it into a division of the acquirer. Sometimes referred to as "bolt-on acquisitions."
Notes: that fills a key corridor. GroupEx's track record of success and profitability in Latin America was a key factor in pursuing this transaction, and we believe their inclusion into Coinstar E-Payment Services will create significant value. Specifically, we can expand GFC's U.S. agent base to several key states where they currently have no presence. Moreover, we can add retail doors by introducing GroupEx to our domestic customer base," stated Dave Cole, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Coinstar, Inc. "We believe this is an excellent use of capital for our stockholders, as we build a category of service that is very important to our retailers and provides a significant global opportunity."
"I am very excited at the prospect of being part of the Coinstar E-Payment Services family. The opportunity to expand the reach of GroupEx across the 140 plus countries to which CMT services are offered opens new horizons for us. In addition, to fit into Coinstar's 4th Wall program is great for our customers and for the retailers that we care passionately about. I look forward to my team's future with Coinstar," stated Ben Knoll, CEO of GroupEx.
The transaction is expected to close as soon as all regulatory approvals are obtained. We are not adjusting our 2007 guidance at this time since the timing of the close is not known. If necessary, guidance will be updated at closing. Excluding the effects of the amortization of intangible assets, which cannot be determined at this time, Coinstar believes that for fiscal 2008 this transaction will be neutral to slightly accretive to Adjusted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. .
Between signing and the closing of this transaction, Coinstar will obtain an independent valuation of certain of GFC's tangible and intangible assets for the purposes of purchase price allocations. As a result, Coinstar cannot yet quantify the impact of the non-cash purchase price charges related to items such as amortization of intangible assets and the purchase accounting step ups on reported GAAP GAAP
See: Generally Accepted Accounting Principles
See generally accepted accounting principles (GAAP). earnings.
The net purchase price will be funded through debt.
Coinstar, Inc. announced that a conference call to discuss the acquisition of GFC will be broadcast live over the Internet today, Wednesday, July 25, 2007, at 4:30 p.m. Eastern Time. The Webcast will be hosted at the About Us - Investor Relations Investor relations
The process by which the corporation communicates with its investors. section of Coinstar's Web site at www.coinstar.com.
About Coinstar, Inc.
Coinstar, Inc. (NASDAQ:CSTR) is a multi-national company offering a range of 4th Wall[TM] solutions for the retailers' front of store consisting of self-service coin counting, electronic payment solutions, entertainment services, money transfer and self-service DVD DVD: see digital versatile disc.
in full digital video disc or digital versatile disc
Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. rental. The company's products and services can be found at more than 60,000 retail locations, including supermarkets, drug stores, mass merchants, financial institutions, convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. and restaurants.
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The words "believe," "estimate," "expect," "intend," "anticipate," "goals," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding Coinstar, Inc.'s acquisition of GroupEx, as well as Coinstar's future expectations, plans, prospects and operating results. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Coinstar, Inc., as well as from risks and uncertainties beyond Coinstar, Inc.'s control. Such risks and uncertainties include, but are not limited to, regulatory risks relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the approval of the GroupEx acquisition (including regulatory and other risks that may prohibit the acquisition), the termination, non-renewal or renegotiation on materially adverse terms of our contracts with our significant retailers, payment of increased service fees to retailers, the ability to attract new retailers, penetrate new markets and distribution channels, cross-sell our products and services and react to changing consumer demands, the ability to achieve the strategic and financial objectives for our entry into or expansion of new businesses, the ability to adequately protect our intellectual property, and the application of substantial federal, state, local and foreign laws and regulations specific to our business. The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review "Risk Factors" described in Item 1A of Part I of our most recent Annual Report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. filed with the Securities and Exchange Commission. These forward-looking statements reflect Coinstar, Inc.'s expectations as of the date of this release. Coinstar, Inc. undertakes no obligation to update the information provided herein.
EBITDA is composed of GroupEx's earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
> Twelve Months Ended 12/31/2006 (in millions) > Earnings before tax > $ 4.9 Depreciation and amortization > 1.4 Interest expense, net > 0.7 > EBITDA > $ 7.0