Coinstar Inc. has refinanced its debt, in part to help its Coinstar E-Payment Services Inc. subsidiary complete a deal to buy a money transfer services company.
Coinstar, of Bellevue, Wash., said Monday that it had entered a five-year, $400 million senior credit facility, with the option to extend it to $450 million under certain conditions.
The funding will be used largely to pay off a $310 million credit facility from 2004 and to finance the deal for GroupEx Financial Corp. of La Mirada, Calif.
Coinstar E-Payment Services agreed to pay $60 million to buy GroupEx when the deal closes and another $10 million if certain performance goals are met within 15 months of its completion. The deal was announced in July.
Paying off the 2004 credit facility will result in a $1.9 million pretax charge that Coinstar said was not included in its fourth-quarter guidance.
Dave Cole, Coinstar's chief executive, said in a press release: "We are pleased to close this financing, which carries a more favorable interest rate than our prior credit facility. It also contains fewer restrictions."
He said that "these two factors will play an important role in successfully funding our growth and driving long-term profitability."
