BELLEVUE, Wash. — Coinstar, which operates DVD rental and coin kiosks in supermarkets, drugstores and mass merchandising chains, announced it has completed the sale of its entertainment services business to National Entertainment Network, a company based in Louisville, Colo., that was formed last month in anticipation of the sale.
NEN will operate coin operated gumball and toy machines, kiddie rides, skill cranes and video games in high retail traffic location such as supermarkets and mass merchandisers. With the transaction, NEN assumed the operations of the entertainment services business, including substantially all of the business's related assets and liabilities.
Coinstar received nominal consideration and expects to record a pre-tax loss in the range of $52 million to $57 million and realize a one-time tax benefit in the range of $82 million to $87 million on the sale of the business. As a result, the company expects a net gain in the range of $25 million to $35 million in the third quarter of 2009, which will be reported under discontinued operations in the company's consolidated statement of operations.
"As we discussed on our second quarter conference call, we are focused on leveraging our strength in self-service automated retail to drive growth and increase shareholder value," said Paul Davis, chief executive officer of Coinstar. "Our core DVD and Coin kiosk businesses provide a solid foundation and, with the sale of our entertainment services business, we are better positioned to maximize the substantial market opportunity in automated retail."
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