Outerwall acquires online electronics recycler Gazelle

Shoring up their existing ecoATM business, Outerwall announced that they have acquired much of online electronics recycler Gazelle for $18 million in cash. Gazelle operates an online site where consumers can buy and sell pre-owned electronics including smartphones, tablets, desktop computers and laptops. The Gazelle online presence will join Outerwall’s existing ecoATM business which puts self-serve kiosks out in retail locations where consumers can trade in their used electronic devices for cash. The items collected at those kiosks are sold to third parties by Outerwall.

By adding Gazelle into their mix, Outerwall CEO Erik Prusch thinks the company will “enable ecoATM to gain critical mass, provide margin revenue uplift opportunities and leverage a direct-to-consumer channel for collected devices.” That last bit suggests Outerwall may start using some of the devices collected through ecoATM to sell on the Gazelle.com site, keeping the revenues within the overall company.

Gazelle’s headquarters are located in Boston with operational facilities in Kentucky and around 100 employees. In 2013 Gazelle reported they reached the $100 million in annual revenue level. That would seem to imply things have cooled off considerably if they sold the business for only $18 million.

Besides ecoATM and now Gazelle, Outerwall also owns and operates Redbox, the self-serve video kiosks, and coin redemption business Coinstar. Redbox is the heavyweight for Outerwall, generating 77 percent of the company’s revenue in the third quarter with Coinstar pulling in almost 17 percent.

source: Outerwall (MarketWatch)

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