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red boxstruggling DVD rental kiosk operator and video streamer, is now Chicken Soup for the Soul Entertainment — Streaming aggregator, which takes its name from the best-selling self-help book series.
Soul Entertainment’s Chicken Soup announced Thursday that it has completed its acquisition of Redbox Entertainment in an all-stock deal valued at about $375 million, after Announcing the Purchase Agreement in May.
The deal ends Redbox’s brief revenge as a listed entity. October 2021 Red Box Merger with Special Purpose Acquisition Company (SPAC) to go public. But the company’s business fell sharply and reported mounting losses, leading Redbox lays off 150 jobs, about 10 percent of employees earlier this year.Before going public last year, Redbox’s parent company, Outerwall, was Taken private by Apollo Global Management in 2016.
Redbox brings to CSSE its network of approximately 36,000 kiosks in the US, as well as a customer loyalty program with over 40 million members, as well as ad-supported and transactional VOD services. Together, CSSE and Redbox now have over 145 free ad-supported streaming television (FAST) channels.
Chicken Soup Entertainment — whose parent company owns the rights to the book series of the same name — owns and operates AVOD streaming services, including Crackle (acquired from Sony Pictures Television), Popcornflix and Chicken Soup. The company also acquires and distributes video content through its Screen Media and 1091 Pictures subsidiaries, and produces original video content for Soul TV Group through Chicken Soup.
The company expects that with the Redbox acquisition, revenue will more than triple to about $500 million a year.
“I’ve been looking forward to the day when Redbox becomes part of the Soul Entertainment family of chicken soup — and today is the day,” Bill Rouhana Jr., chairman and CEO of Soul Entertainment’s chicken soup, said in a statement.
Soul Entertainment’s Chicken Soup expects the combined company to exit in 2022 with revenue of more than $500 million and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of more than $100 million to $150 million. CSSE said it expects to achieve more than $40 million in annual operating cost synergies by 2023.
As previously announced, Soul Entertainment shareholders will own about 76.5% of the combined company, and Redbox shareholders will own about 23.5% of the combined company (fully diluted).
With the completion of the Redbox deal, CSSE has appointed former Redbox CEO Galen Smith as Redbox’s Executive Vice Chairman and Soul Entertainment’s Chicken Soup Executive Vice Chairman. Smith will oversee the company’s growth plans, including strategic acquisitions. Additionally, Jonathan Katz has been named president of Soul Entertainment’s Chicken Soup. Katz previously held senior management positions at Scripps Networks, Katz Networks and Turner Broadcasting. In his new role, he will oversee the company’s operations, including streaming services, Redbox kiosks and original content studios. Smith and Katz report to Ruhana.
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