CSSE - Chicken Soup for the Soul completes Redbox acquisition saga

Chicken Soup for the Soul Entertainment ( NASDAQ: CSSE ) has completed its acquisition of Redbox Entertainment ( NASDAQ: RDBX ) as planned, creating a unified content and distribution offering - and bringing an end to strange stock trading around the deal.

Existing Redbox shareholders will receive a fixed exchange of 0.087 shares of CSSE per Redbox share. The result is that CSSE stockholders own about 76.5% of the combined company, with Redbox holders owning the other 23.5%.

Redbox ( RDBX ) closed trading Wednesday at $1.65. CSSE closed Wednesday at $14.75, implying a value of $1.28 for each Redbox share. But Redbox had hit as high as $18.11 as recently as mid-June - and controlling shareholders had signed off on the sale to CSSE knowing it came at an 88% discount, launching some further wild speculative trading in Redbox shares .

CSSE operates video streaming services notably through Crackle Plus, which owns and operates ad-supported video-on-demand services including Crackle, Chicken Soup for the Soul, and Popcornflix. It makes video content through the Chicken Soup for the Soul Television Group, and acquires/distributes programming through its Screen Media and 1091 Pictures labels. And CSSE's parent publishes the well-known book series by that name, as well as producing branded premium pet food.

With Redbox, CSSE gets Redbox's streaming-service and content offerings as well as the company's 36,000 kiosks that distribute video and game discs (to a customer network of over 40M).

The company is expecting revenue to more than triple through the deal. CSSE expects it will exit 2022 with a run-rate exceeding $500M in revenue and $100M-$150M in adjusted earnings before interest, taxes, depreciation and amortization. And it expects to deliver annual run-rate cost synergies exceeding $40M in 2023.

It's also looking for revenue synergies from complementary assets, including "expansion of ad inventory through distribution of its larger content library and production pipeline across AVOD and FAST channels, and increased access to the TVOD window for original film productions," as well as using the kiosks and Redbox loyalty program for marketing synergy.

Chicken Soup for the Soul is holding a conference call to discuss the deal and earnings, Thursday at 4:30 p.m. ET .

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