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Outerwall stock surges on $1.6 billion deal to go private

A Redbox DVD from an automated kiosk.
Carlos Osorio | Toronto Star | Getty Images

Shares of Outerwall jumped 11 percent Monday after the company announced it would be bought for $1.6 billion by funds managed by Apollo Global Management.

Certain funds run by Apollo will buy all of Outerwall's outstanding stock for $52 a share in an all-cash tender deal. The price represents an 11 percent premium on Outerwall's closing price Friday.

The retail company, which owns kiosk-businesses like Redbox, Countstair, and ecoETM, will be privately-held after the sale. The deal is expected to close in the third quarter of 2016.

"Apollo is an ideal partner to support Outerwall's efforts to continue serving our millions of loyal customers and dedicated retail partners through our unrivaled network of kiosks and automated retail offerings," said Erik Prusch, CEO of Outerwall.

The transaction was unanimously approved by Outerwall's Board but is conditioned on a tender deal, which still requires regulatory approvals.

"Outerwall is a dynamic customer-focused business that delivers superior kiosk experiences that delight consumers and generate value for its retailer partners," said David Sambur, partner at Apollo. " We look forward to working with Outerwall's talented and dedicated team to continue the business's strong heritage of growth and innovation. "

Outerwall will release its second quarter earnings after the closing bell Thursday, and will not hold a conference given the sale announcement.