The Evolution From Coins to Coffee, and Beyond

The Evolution From Coins to Coffee, and Beyond

The Motley Fool is on the road in Seattle! Recently we visited Coinstar -- now officially renamed Outerwall -- to speak with CFO-turned-CEO Scott Di Valerio about the 22-year-old company's well-known coin-cashing machines, as well as its more recent acquisition of Redbox, and future initiatives to expand into other aspects of the automated retail market.

In this brief video segment Scott recounts the company's history, from the founder's frustrated attempt to exchange coins at a bank in the '90s to its partnership with McDonald's and eventual acquisition of Redbox, and where it may all lead in the future. The full version of the interview can be watched here.

A full transcript follows the video.

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Eric Bleeker: Hey, I'm Eric Bleeker, joined here by Scott Di Valerio, CEO of Coinstar or, soon to be "Outerwall," hopefully?

Scott Di Valerio: Yes.

Eric: Just wanted to check in with the metamorphosis of the business, because it is a truly intriguing business. Can you talk about how the company got started and progressed to the point it's at right now?

Di Valerio: You bet. Coinstar started around 22 years ago. Our founder was in grad school and had a whole bunch of coins, and was ready to go out one night and went to the bank to give them the coins so he could go out, and the bank said, "No, you need to roll all your coins," all those kind of good things.

He came back and did his senior thesis on how to get coins back into the marketplace in a more efficient and effective way, and then came back to Seattle and started Coinstar. Again, the rest is kind of history, from that perspective. We started with that Coinstar line of business, and continue to grow off of that.

The company did a number of acquisitions for a period of time, and one of those began a strategic partner with McDonald's, with Redbox. That was about eight years ago. We continued to increase our investment in Redbox over time, and then acquired them outright about four-and-a-half, five years ago and brought them up underneath the Coinstar brand.

We've been very excited about that, the marriage of both the coin line of business as well as the Redbox line of business, and then our ability to go out and continue to innovate in new businesses with Rubi, our coffee business, and we have four or five other small businesses that we're testing out; some that will work, some that won't, but again it's our history to be innovative, inventive, and to continue to try and grow out the business in new ways.

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Eric Bleeker, CFA, has no position in any stocks mentioned. The Motley Fool recommends McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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