The revamped capital structure includes $125 million of incremental equity from new and existing STX Entertainment equity investors, including TPG, Hony Capital and Liberty Global and a balance sheet that includes a $350 million JP Morgan-led credit facility.
The merged entity will have an increased financial scale with more than $600 million in pro forma revenue for calendar 2019 and over $300 million of aggregated future revenue from STX Entertainment films already released last year.
The stock-for-stock merger agreement will see the creation of a publicly traded, independent content and distribution company with a presence in the U.S., India and China.
The new management team will be led by Kishore Lulla as Executive Co-Chairman, Robert Simonds as Co-Chairman & Chief Executive Officer, Andrew Warren as Chief Financial Officer, Rishika Lulla Singh and Noah Fogelson as Co-Presidents, and Prem Parameswaran as Head of Corporate Strategy.
“Together we will have the relationships, management expertise and resources to create new content and grow rapidly in the largest and most attractive global markets,” said Simonds. “On day one, we will have the ability to tap into our significant combined libraries, and draw upon our deep relationships with A-list actors, directors and producers across the globe to create even more compelling content for millions of consumers.”
The newly created entity will leverage existing global partnerships with Apple, Amazon, Microsoft, NBCUniversal and Google and YouTube. The combined company is expected to release some 40 feature films in 2020 and more than 100 hours of original episodic content.
Streamer Eros Now, currently being offered free as a coronavirus pandemic gesture to a lockdown audience, has 188 million registered users worldwide, with 26 million of them being paid subscribers. It has more than 12,000 titles, the largest collection of Indian content in the world.
News of the merger comes after a trying year for STX, the studio that was created in hopes of offering the kind of mid-budget movies most studios stopped making in favor of pricey blockbusters. Last year’s releases “Hustlers” and “The Upside” were both commercially successful, but most of its 2019 slate — including Diane Keaton comedy “Poms,” drama “The Best of Enemies” and animated adventure “UglyDolls” — were financial missteps. There was chatter that STX was trying to find a buyer or new financial backers, rumors that were reignited after the company sold “My Spy,” one of the only films on its 2020 calendar, to Amazon Studios earlier in April.
“This merger will not only fuel our growth, but will also diversify our underlying sources of revenue and subscribers with a truly global play, building a powerhouse between East and West. We are well positioned to create long-term value for our shareholders, partners and employees,” said Kishore Lulla.