Local group buys Coinstar division

LOUISVILLE – A newly-formed private company in Louisville has reached an agreement to acquire the entertainment services division of Coinstar Inc. (Nasdaq:CSTR).

The deal will make Louisville-based National Entertainment Network Inc. one of the nation’s largest direct operators of gumball and toy machines, kiddie rides, skill cranes and video games.  Bellevue, Wash.-based Coinstar will maintain ownership of its main coin-counting and other financial service businesses.

Financial terms of the deal were not disclosed, but Coinstar said it accepted a “nominal consideration” for the division.  The resulting pre-tax loss of $52 million to $57 million for Coinstar will translate into a one-time tax benefit of $82 million to $87 million for the public company, or a $25 million to $35 million net gain.

National Entertainment Network will operate as a stand-alone, privately-held company, retaining its headquarters in Louisville, company officials said.

Kevin J. Wall will lead National Entertainment Network as its president and chief executive officer, bringing more than 20 years of experience in the coin operated management business. Other leading company principals include William L. Lewis and Richard Gerhardt.

“We feel there is strong potential to grow this company and make it successful,” Wall said in a press release.  “We recognize that there are significant challenges facing our industry with potential new government regulation and volatile petroleum prices among other factors, however, with a strategic vision and a new business plan we will boost sales, eliminate inefficiencies and improve customer service elements.”

Through the acquisition, the company now has operating arms in all 50 states, Mexico and Puerto Rico.  National Entertainment Network amusement vending products, equipment and services are available at supermarkets, mass merchants, restaurants, malls and other high traffic retail locations.

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