Redbox — the streaming platform once synonymous with big red DVD rental kiosks — has agreed to be acquired by Chicken Soup For The Soul Entertainment Inc. (CSSE), parent firm of Crackle.
The all-stock arrangement will see Redbox stakeholders trade each of their shares for 0.087 of CSSE Class A shares. Collectively, existing Redbox stock owners will hold 23.5% of the combined firm once the transaction is complete. The boards of CSSE and Redbox have approved the deal, and it is expected to close in the second half of fiscal 2022.
The deal comes after Redbox went public last fall via a $693 SPAC (special purpose acquisition company) tie-up with Seaport Global Acquisition Corp. Soon after, Redbox’s shares were trading around $15 apiece. However, at the time of writing, the firm is at $5.60 per share. Indeed, financial woes have plagued Redbox for some time. The company has previously said the COVID-19 pandemic had a significant impact on its business, leading it to cut 1,467 jobs in April — equal to about 10% of its workforce.
Of course, while Redbox’s DVD business is still alive and kicking (the company has close to 40,000 kiosks in operation), it has staked its future on streaming. Redbox offers both VOD rentals, featuring titles such as “Spider-Man: No Way Home” and “Uncharted,” while also carrying ad-supported video-on-demand (AVOD) offerings like “Unsolved Mysteries” and “Killing Them Softly.”
“Today marks a transformative moment for Chicken Soup for the Soul Entertainment and an inflection point for the ad-supported streaming industry,” said CSSE CEO William J. Rouhana Jr. “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.”
AVOD has been a key strategy for CSSE for some time. The firm purchased Crackle from Sony in 2020, and it operates Popcornflix, which also offers a slew of ad-supported shows and movies.
“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,” Rouhana said. “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.”
Redbox
Redbox is a free ad-supported video streaming service with dozens of live streaming channels and on demand movies. Users can also rent or buy movies through the platform.