NCR Selling Blockbuster Express to Coinstar's Redbox
DULUTH, GA. -- NCR has entered into an agreement to sell its Blockbuster Express kiosks and related assets to Redbox for up to $100 million. The acquisition includes the purchase of the DVD kiosks, certain retailer contracts, and DVD inventory from NCR's entertainment line of business.
In connection with the transaction, NCR will also enter into a manufacturing and services agreement with Redbox's parent company, Coinstar, that would allow Coinstar to procure from NCR hardware, software and services that will yield $25 million in gross profit over five years. The transaction is subject to regulatory approval and is expected to close in the third quarter of 2012.
In an email to customers, Blockbuster Express wrote:
"Dear Valued Customer,
NCR, which operates your Blockbuster Express kiosks, has entered into an agreement to sell its kiosks and other assets to Redbox. Until the transaction is completed (we anticipate in the third quarter of 2012), you will continue to enjoy the convenience, choice, and value you're used to from Blockbuster Express. Until the sale is completed, we will continue to run the business as we have been, focused on bringing you the latest New Release movies with most titles only $2 for the first night. You'll also notice that we've increased our In-Stock Guarantee value so you will now enjoy a movie night on us with a value of up to $3 if we don't have the New Release movie you want in stock.
As a reminder, we still have hundreds of great movies available at $1 and additional nights of all movies are still only $1, all part of preserving an exceptional value for an affordable night of entertainment. We'll continue to provide you with information on any changes that result from this recent announcement but for now we just wanted to say thanks for being our customer."
NCR also reported revenue grew 17 percent during the three months ended Dec. 31, 2011 compared to the prior year period. The company also reported strong cash flow growth and said that it expected revenue for the full 2012 year would be between 7 percent and 9 percent.
In a related story, CSNews Online reported "yesterday that Redbox parent Coinstar is negotiating with Verizon to offer a streaming service to customers nationwide before the end of the year. The new venture, which will challenge Netflix for at home entertainment supremacy, will supplement the streaming and download service with hard-copy access to DVDs and Blu-ray discs at the Redbox kiosks found at c-stores, grocery stores and elsewhere.