Redbox, DVD rental kiosk and video player, is now part of Chicken Soup for the Soul Entertainment – the streaming aggregator that gets its name from the bestselling self-help book series.
Chicken Soup for the Soul Entertainment announced Thursday that it has completed the acquisition of Redbox Entertainment in an all-share deal valued at approximately $375 million, after the purchase agreement was announced in May.
The deal ends Redbox’s short term as an independent, publicly traded entity. In October 2021, Redbox went public after its merger with a Special Purpose Acquisition Company (SPAC). But the company experienced a sharp decline in business and reported mounting losses, prompting Redbox to lay off 150 employees, about 10% of its workforce, earlier this year.
Redbox offers its network about 36,000 kiosks in the United States, with a customer loyalty program of more than 40 million members, as well as ad-supported and transactional VOD services. Together, CSSE and Redbox now have over 145 ad-supported free FAST channels.
Chicken Soup for Soul Entertainment — whose parent company owns the rights to the book series of the same name — owns and operates AVOD streaming services including Crackle (which it acquired from Sony Pictures Television), Popcornflix and Chicken Soup for the Soul. The company also purchases and distributes video content through its subsidiary Screen Media and 1091 Pictures and produces original video content through Chicken Soup for the Soul Television Group.
The company expects to more than triple revenue by acquiring Redbox to approximately $500 million annually.
Bill Rohana Jr., Chairman and CEO of Chicken Soup for the Soul Entertainment, said in a statement.
Chicken Soup for the Soul Entertainment expects the combined company to exit in 2022 with an operating rate of more than $500 million in revenue and $100 million to $150 million in adjusted EBITDA. CSSE said it expects to achieve annual operating rate cost synergies of more than $40 million in 2023.
As previously announced, Soul Entertainment’s Chicken Soup shareholders will own approximately 76.5% of the combined company, and Redbox shareholders will own approximately 23.5% of the combined company on a fully diluted basis.
With the Redbox deal closing, CSSE has appointed Galen Smith, the former CEO of Redbox, to the new position as Executive Vice President of Redbox and Chicken Soup for the Soul Entertainment. Smith will oversee the company’s growth plans, including strategic acquisitions. In addition, Jonathan Katz has been appointed President of Chicken Soup for the Soul Entertainment. Katz previously held senior executive positions at Scripps Networks, Katz Networks, and Turner Broadcasting. In the new position, he will oversee the company’s operational business, including streaming services, Redbox kiosks and original content studios. Smith and Katz report to Rouhana.
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