RedBox Acquired By Surprising Company
Chicken Soup for the Soul Entertainment has struck a deal to acquire Redbox, which has more than 30,000 video rental kiosks around the U.S., for $375 million. The deal will be an all-stock transaction, which adds Redbox to Chicken Soup For the Soul's video portfolio, which already includes the ad-supported video streaming platform Crackle+. Given that there are four times as many Redbox kiosks as there were Blockbuster Video stores at the company's peak, it goes without saying that this acquisition immediately makes Chicken Soup for the Soul one of the biggest players in the home entertainment space. There are also 40 million Redbox Perks users -- a subscription service that offers free one-night rentals and other services.
Per Media Play News, a leading news source in the home video space, he combined company will have increased scale across content production and distribution, with a large content library, extensive digital capabilities in on-demand and free ad-supported video. Best known for the Chicken Soup for the Soul motivational books, the company was founded in 1993, but has branched out not only into entertainment, but industries like food and pet food as well.
"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 CEO of Chicken Soup for the Soul Entertainment, said in a statement. "Our acquisition of Redbox will accelerate the scaling of our business as it combines complementary teams and services to create the streaming industry's premier independent AVOD."
"We believe that Chicken Soup for the Soul Entertainment is the ideal partner for Redbox. 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, CEO of Redbox. "This deal provides Redbox stockholders with the opportunity to participate in the significant near- and long-term upside potential of a diversified and growing company with greater scale and resources."
Big-ticket Redbox stockholders who control about 85% of the company's stock have voted to move forward with the deal. The deal is expected to close in the second half of 2022, subject to regulatory approval and the deal being formally finalized. 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, which will continue to trade under Chicken Soup for the Soul's current ticker designation of CSSE.