STX Entertainment is up for sale only 16 months after it merged with Indian studio Eros International.
The combined entity, ErosSTX Global, announced Tuesday that it was engaged in talks with a third party to sell the division behind films like “Bad Moms” and Jennifer Lopez’s “Hustlers.” The company has hired Lazard as a financial advisor on the potential transaction. News of the sale coincided with a 28% dive for the publicly traded entity on the New York Stock Exchange.
“[ErosSTX] has entered into exclusive negotiations with a third party for the sale of its STX Entertainment subsidiary, during which the parties will conduct mutual diligence and negotiate definitive agreements,” an announcement read. The potential buyer was not identified.
ErosSTX also negotiated an extension with senior lenders to resolve $127.4 million in debt. Should a sale materialize before December 3, repayment deadlines could extend into February 2022.
In August, Variety reported that the company was exploring an outright sale of its film library to pay down its debt, which stood at $150 million at that time. Insiders close to the company argued that a library sale would resolve its revolving credit facility set up by JP Morgan, $22 million in mezzanine financing and add cash to the balance sheet. It never materialized.
Despite the challenges presented by COVID-19, STX managed to offload projects to streamers, like Kristen Bell’s “Queenpins” which went to Paramount and yielded a $10 million profit. They also counted modest hits on paid VOD, like the Gerard Butler action film “Greenland.”
Existing development titles include a Will Smith-David Leitch action package titled “Fast & Loose.”