Image provided by Redbox.
Chicken Soup for the Soul Entertainment, Inc., an operator of advertising-supported video-on-demand streaming services, has agreed to acquire Redbox Entertainment Inc. in an all stock transaction, according to a press release.
The transaction is valued at $375 million, comprising about $50 million in Chicken Soup for the Soul Entertainment stock and an assumption of $325 million in debt, according to a yahoo!entertainment report.
The combination will create an integrated direct-to-consumer media platform delivering entertainment with increased scale across content production and distribution, with a content library, more than 38,000 kiosks nationwide, extensive digital capabilities and access to millions of targeted customers, including nearly 40 million Redbox Perks members.
«Today marks a transformative moment for Chicken Soup for the Soul Entertainment and an inflection point for the ad-supported streaming industry,» William J. Rouhana Jr., chairman and chief executive officer of Chicken Soup for the Soul Entertainment, said in the press release. «Redbox has 40 million customers in its loyalty program and high-potential digital television assets including carriage of over 130 FAST digital channels on its Free Live TV platform, as well as a robust TVOD and PVOD platform. Together, we will build a fully developed AVOD and FAST streaming business: proven branded streaming services, formidable content and production capabilities, and a strong AVOD and FAST ad sales operation.»
«By joining forces, we will accelerate Redbox’s transition from a physical to high growth digital media company and be the only entertainment provider truly focused on value for consumers,» said Galen Smith, chief executive officer of Redbox, in the release.
The combined company expects to deliver annual-run rate cost synergies in excess of $40 million in 2023. Chicken Soup for the Soul Entertainment expects that the combined company will exit 2022 with a run-rate exceeding $500 million of revenue and $100 million to $150 million of adjusted EBITDA.
Redbox stockholders will receive a fixed exchange ratio of 0.087 of a share of class A common stock of Chicken Soup for the Soul Entertainment per Redbox share.
Following the close of the transaction, Chicken Soup for the Soul Entertainment stockholders will own approximately 76.5% of the combined company, and Redbox stockholders will own approximately 23.5% of the combined company, on a fully diluted basis.
The transaction is expected to close in the second half of 2022, subject to regulatory approvals and other customary closing conditions. Upon closing, the combined entity will retain the name Chicken Soup for the Soul Entertainment and will continue to trade under the ticker symbol «CSSE» on the Nasdaq stock exchange.