BELLEVUE, Wash. - Coinstar, Inc. (NASDAQ: CSTR) has acquired CellCards of Illinois, L.L.C., formerly a majority owned subsidiary of American Payment Systems, and one of the nation's largest distributors of prepaid products.
According to a news release, the acquisition adds new drugstore point-of-sale locations that, combined with Coinstar's existing kiosk network, bring the company's total number of distribution points to approximately 25,000 in North America. Coinstar will provide an in-lane product delivery option to all of its retailers.
Founded in 1998, Chicago-based CellCards offers a set of prepaid products including wireless, long distance and MasterCard® cards. In addition, the company offers bill payment capabilities for utilities and other common services. It has multi-year agreements with national drugstore retailers CVS, Eckerds and Walgreens.
CellCards is now a wholly-owned subsidiary of Coinstar, Inc.; the management team has signed employment agreements with Coinstar and will continue to operate the business based in Chicago.
Steve Verleye, general manager of Coinstar's Electronic Payment Solutions, said in the release, "With this acquisition, we move from a company that primarily sold coin counting services on kiosks to the grocery industry, to a company moving towards a range of consumer products available via a number of distribution methods in multiple classes of trade."
As part of the acquisition, Coinstar has engaged the services of ATM industry veteran Sam Jonas, founder of Cash Resources, an ISO purchased by eFunds in 2002, to accelerate the integration and expansion of the CellCards business.
"The prepaid products category represents the largest growth opportunity in the payments systems industry today," Jonas said. "The collective experience, product range, and existing distribution that Coinstar and CellCards provide will be powerful tools in bringing this new category of products to market."
