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Bellevue's Outerwall to Be Acquired, Return to Private Ownership


Transaction Valued at Approximately $1.6 Billion
Outerwall Board of Directors Declares $0.60 Quarterly Dividend

Bellevue-based Outerwall Inc. has announced that it has entered into an Agreement and Plan of Merger with affiliates of certain funds managed by affiliates of Apollo Global Management, LLC, a global alternative investment manager, pursuant to which the Apollo Funds will acquire all of the outstanding shares of Outerwall common stock for $52.00 per share in cash.  No word was given as to whether the company will be relocated or jobs will be affected.
The purchase price represents a premium of approximately 51 percent over Outerwall’s closing stock price on March 14, 2016, immediately prior to the announcement that the Company’s Board of Directors initiated a thorough and comprehensive process to explore strategic and financial alternatives to maximize shareholder value. The transaction, which was unanimously approved by Outerwall’s Board of Directors, has a total enterprise value of approximately $1.6 billion, including net debt.
“Outerwall’s Board of Directors has undertaken a comprehensive review of a wide range of strategic and financial alternatives to maximize value for all Outerwall shareholders.  We are pleased to reach this agreement, which follows a robust process and provides an immediate and substantial cash premium to our shareholders,” said Erik E. Prusch,Outerwall’s Chief Executive Officer. “Apollo is an ideal partner to support Outerwall’sefforts to continue serving our millions of loyal customers and dedicated retail partners through our unrivaled network of kiosks and automated retail offerings.  We look forward to working closely with Apollo as we continue to strengthen our businesses and execute on our strategic plan.”
“We are extremely excited for our funds to acquire Outerwall,” said David Sambur, Partner at Apollo. “Outerwall is a dynamic customer-focused business that delivers superior kiosk experiences that delight consumers and generate value for its retailer partners. We look forward to working with OW’s talented and dedicated team to continue the business’s strong heritage of growth and innovation.”

Transaction Details
The transaction will be completed through an all-cash tender offer. The Outerwall Board of Directors unanimously recommends that Outerwall shareholders tender their shares in the offer.
The transaction is conditioned upon satisfaction of the minimum tender condition, which requires that shares representing more than 50 percent of the Company’s common shares be tendered and the receipt of certain regulatory approvals and other customary closing conditions. The transaction is currently expected to close during the third quarter of 2016. Following the transaction, Outerwall will become a privately held company and Outerwall’s common shares will no longer be listed on any public market.
Morgan Stanley & Co. LLC is serving as financial advisor to Outerwall and Wachtell, Lipton, Rosen & Katz and Perkins Coie LLP are serving as legal counsel. LionTree Advisors, Bank of America Merrill Lynch, Barclays, Credit Suisse and Jefferies LLC are acting as M&A advisors to Apollo and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Apollo.
Financing is being provided by Bank of America Merrill Lynch, Jefferies Finance LLC,Barclays and Credit Suisse.
Outerwall plans to release its second quarter earnings after market close on Thursday, July 28 and does not intend to hold a conference call to discuss earnings given the announced sale of the Company.
In addition, on July 24, 2016, the OW Board of Directors declared a quarterly dividend of $0.60 per share of common stock. The dividend is expected to be paid onSeptember 6, 2016, to stockholders of record at the close of business on August 23, 2016.

About Outerwall
Outerwall Inc. has more than 20 years of experience creating some of the most profitable spaces for their retail partners. The company delivers breakthrough kiosk experiences that delight consumers and generate revenue for retailers. As the company that brought consumers Petbox, Redbox® entertainment, Coinstar® money services, and ecoATM® electronics recycling kiosks, OW is leading the next generation of automated retail and paving the way for inventive, scalable businesses. OW kiosks are in neighborhood grocery stores, drug stores, mass merchants, malls, and other retail locations in the United States, Canada, Puerto Rico, the United Kingdom, and Ireland.
About Apollo Global Management
Apollo is a global alternative investment manager with offices inNew York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt,Madrid, Luxembourg, Singapore, Mumbai, Delhi, Shanghai and Hong Kong. Apollo had assets under management of approximately $173 billion as of March 31, 2016, in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources.