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Tag: STX Entertainment

  • Eros International, STX Entertainment announce completion of merger-of-equals transaction

    Eros International, STX Entertainment announce completion of merger-of-equals transaction

    KOLKATA: Eros International and STX Entertainment have announced the completion of their merger-of-equals transaction. The newly-combined company will migrate in the coming weeks to trade on the NYSE under the symbol ESXI and will operate under the name Eros STX Global Corporation. The company will continue to be domiciled in the Isle of Man and headquartered in both Burbank, California, USA and Mumbai, Maharashtra, India.

    Pursuant to the merger agreement, Eros International issued contingent value rights (CVRs) to the former stockholders of STX Entertainment in the merger. The CVRs will be settled in ordinary shares of Eros STX on a date between 75 days and six months after the effective time of the merger.

    Eros STX will benefit from diversified underlying sources of revenue and consumers with a truly global media and consumer entertainment play, building a powerhouse between East and West. Eros STX has a unique capability to present film and episodic libraries and pipeline of original content to a broad and growing global audience through multi-year output deals, strategic alliances and the market leading Eros Now streaming platform. Eros STX is well positioned to create long-term value for shareholders, partners and employees.

    In India, Eros STX will continue to have a leading box office presence and one of the largest and most valuable libraries of Indian language films. In China, the Company will benefit from and expand upon some of the most comprehensive business and creative relationships in the industry. In the United States and the rest of the world, it will utilise its revolutionary, industry-disrupting and cost effective, data-driven production, marketing and distribution system innovations to create the studio system of the future: visionary, nimble, efficient and sustainable.

    Eros STX capital structure includes $110 million of incremental equity, with an additional $15 million to be completed within the next 90 days, from new and existing global investors including TPG, Tencent, Hony Capital and Liberty Global. The combined company is expected to generate approximately $50 million in annual run-rate operating synergy.

  • Eros International to up its game in Chinese market & digital biz post STX merger

    Eros International to up its game in Chinese market & digital biz post STX merger

    MUMBAI: At a time when production houses across the world are grappling with losses, Eros International (Eros) has announced a merger with US-based STX Entertainment (STX) under a stock-for-stock agreement. In a rare deal, two content houses from Bollywood and Hollywood have joined hands aimed at serving a larger geographical footprint including the US, China and the Indian markets. While both the organisations had difficulties in the recent past, the deal may bring some relief thanks to their complementary nature. Eros International’s digital arm, Eros Now, is also positioned to benefit amidst the raging OTT war.

    Although the timing of the deal may look odd, the talks began nearly six months ago. Eros International India CEO Pradeep Dwivedi terms the deal with STX Entertainment as a strategic fit.

    In the interview with Indiantelevision.com, he dwells at length on the global content powerhouse the post-merger combined entity is set to create.

    “What we really want to do is to take the best of Hollywood and Bollywood, combine these stories and create a big third leg in China. And the China leg is not just about distribution, it is actually about creation of content, leveraging the Chinese talent on the acting side, directing, photography, VFX, production, post production, music, sound, everything. So there's just tons of activity that is going to happen in China as a consequence of this merger, partly because some of our investors do have Chinese origins coming from Hong Kong,” Dwivedi explains the rationale.

    He also explains the complementary nature of the two entities making it a win-win deal. While STX has Tencent and Alibaba films as partners on the production side, Eros has a huge distribution model in China including partnerships with Shanghai Film Corporation and China Film Distribution Corporation.

    “So at the base level, STX continues to make some movies for the US market, Eros continues to make movies for the Indian market, which becomes almost 60- 70 per cent of our production output. About 20-25 per cent production output will be Indo-US collaboration that Adam Fogelson and I will jointly collaborate and work out as to what we want to do on that. Then there is another 10 per cent layer on top of that which will be all the Chinese movies that we want to make,” he adds.

    Moreover, STX does not have an OTT play but will be able to leverage Eros’s existing OTT play. Until now, the former has been selling some content to a few platforms like Amazon and Netflix.

    The advantage of the deal is that it allows deciding whatever STX content is getting produced afresh will be on Eros Now or be offered to other platforms. The content can be monetised through Eros Now’s subscriber base first and will also help to increase the subscriber base. On the other hand, the content can be monetised from outside deals as well. “That's really one of the advantages that we have on the OTT side coming from this merger,” he highlights.

    “If you look at just the sheer size of the markets that we're addressing with the joint venture, today India already has around 140 crore people. America has another population of 38 crore roughly, and then you add China’s 140 crore on top of that. So what we are ending up with is close to 300 crore of people in the world, which is the potential market between these three countries alone, and I'm not counting other markets like Europe. It's essentially half the population of the world which typically will be covered by the footprint of what we are doing right now,” he points out.

    Dwivedi also assures that there will not be any significant impact on manpower. Manpower costs as well as percentage of overall cost base are not outside the industry. While the combined company is expected to generate approximately $50 million in run-rate operating synergies, he says it will come largely on account of financing integrations and process integration.

  • Eros International, STX Entertainment join to create global entertainment content force

    Eros International, STX Entertainment join to create global entertainment content force

    MUMBAI: Eros International and STX Filmworks have entered into a definitive stock-for-stock merger agreement to create the first publicly traded, independent content and distribution company with global reach and unique positions in the US, India and China.  The transaction is subject to regulatory approvals and closing conditions and is expected to close in the second calendar quarter of 2020.

    The combined company will be called Eros STX Global Corporation.

    STX Entertainment is a fully-integrated global media company specialising in the production, marketing, and distribution of talent-driven motion picture, television and multimedia content. It is the first major entertainment and media company to be launched at this scale in Hollywood in more than twenty years.

    Founded in 2014, STX Entertainment is a leading independent Hollywood studio focused on producing, marketing, owning and distributing film and television content for global audiences across traditional and digital media platforms.

    To date, the company has released 34 films grossing over $1.5 billion in global box office receipts, including such leading titles as Hustlers, Bad Moms and The Upside. STX Entertainment has a deep global distribution network spanning 150+ countries with world-class partners. STX Entertainment has a differentiated asset-lite, capital efficient business model, unique strategic relationships and well-established access to the Chinese entertainment market. STX Entertainment generated revenue of over $400 million in calendar year 2019.

    The combined entity will have a robust pipeline of feature-length films and episodic content with powerful, well-established positions in the world’s fastest-growth global markets. The combined company, with $125 million of incremental equity, will boast a strong and revamped capital structure and superior liquidity position at close with $264 million of pro forma net debt, $195 million of pro forma cash balance and $120 million of available revolver capacity as of December 31, 2019. The combined company, which following the consummation of the transaction will be publicly traded on NYSE, will possess a strong management team led by highly experienced executives from both entities.

    “We are thrilled to join with STX Entertainment as this represents a landmark step in our company’s transformation. We are already at an inflection point as we move to a more consistent, stable and high growth revenue profile with our digital over-the-top (OTT) platform. 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,” Eros International executive chairman and chief executive officer Kishore Lulla said.

    “Collectively, we will have a unique capability to present our film and episodic libraries and pipeline of original content to a broad and growing global audience through multi-year output deals, strategic alliances and our market leading Eros Now streaming platform,” he added.

    “This company will be financially strong and uniquely positioned to compete immediately thanks to its global footprint, strong revenue and recapitalized balance sheet, including a large new equity commitment. These significant investments and no meaningful debt maturities in the near-term enable the company to pursue strategic investments in key growth areas, including traditional and digital distribution, film acquisition, TV production and development of original episodic content,” Lulla added further.

    “The combination of our two companies creates the first truly independent media company that deeply integrates the expertise and creative cultures of Hollywood and Bollywood. Kishore is a legend in the Indian entertainment industry and a pioneer in OTT content development and distribution in India. 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. 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,” STX Entertainment executive chairman and chief executive officer Robert Simonds stated.

    Transformational Combination Creates Strategic and Financial Benefits

    · Robust pipeline of film and episodic content with multi-channel distribution: The combined company is projected to release approximately 40 feature length films, including seven sequels to prior hits and 100+ originals of episodic content, in 2020. The combined company’s global multi-channel distribution across pay-TV via Showtime, digital via Netflix, Hulu, Amazon and Eros Now, the #1 Subscription Video on Demand (“SVOD”) platform for Indian content based on size of OTT library, reduces reliance on theatrical monetization. Eros Now’s strategic and distribution partnerships with Apple, NBCUniversal, Microsoft and YouTube, as well as STX Entertainment’s global output and distribution agreements covering 150+ territories, provides unique opportunities for rapid content proliferation.

    · Well-established positions in the fastest growing and largest global markets: In India, the world’s fastest growing media market, the combined company will have a leading box office presence and one of the largest libraries of Indian language films. In China, the world’s second fastest growing media market, the combined company will have existing production and distribution capabilities plus relationships with the most popular “A-list” talent in this market. In the United States, the combined company will have the leading box office share among independent Hollywood studios, with a successful film library and a substantial film and episodic content pipeline.

    · Strong capital structure and fully funded business plan enables long term stability and drives growth investment: Recapitalized balance sheet with $125 million of incremental new equity funding and meaningful extension of average debt maturities. The combined company will have a fully-funded business plan, a conservative capital structure, and superior liquidity position with $264 million of pro forma net debt, $195 million of pro forma cash balance and $120 million of revolver capacity as of December 31, 2019. In addition, the new company’s risk-mitigated production / distribution model requires limited company equity investment to produce content at scale, features low overhead and utilizes third-party funding to drive attractive margins and returns on investment.

    · Substantial operating synergy opportunities: The combined company is expected to generate approximately $50 million in run-rate operating synergies within 24 months of closing, stemming from integration and scale benefits, optimization of global content distribution and enhanced monetization of the Eros Now platform.

    · A newly constituted board of directors and senior leadership team: The initial Board of Directors of the combined company will include nine board members comprised of highly regarded media, private equity and public company executives with four Directors selected by Eros International (with one independent Director), four Directors selected by STX Entertainment (with one independent Director) and one independent Director selected jointly. Drawing talent from both companies, the combined entity will have a team of industry-leading creative, operational and financial experts, with deep knowledge of key global growth markets and U.S. public company governance experience. In addition to Lulla and Simonds, Andrew Warren, currently STX Entertainment’s Chief Financial Officer, will serve as CFO; Rishika Lulla Singh, currently Chairman of Eros Digital, and Noah Fogelson, currently STX Entertainment’s EVP of Corporate Strategy and General Counsel, will each serve as Co-Presidents; and Prem Parameswaran, currently Chief Financial Officer of Eros International, will serve as Head of Corporate Strategy. To ensure sustained market focus, Adam Fogelson will continue to serve as Chairman of STX Motion Pictures Group, while Pradeep Dwivedi will continue to serve as CEO-India.

  • STX Entertainment, Universal Pictures sign home entertainment deal

    STX Entertainment, Universal Pictures sign home entertainment deal

    MUMBAI: Motion picture and television studio STX Entertainment and Universal Pictures Home Entertainment have entered into a multi-year partnership in which Universal will handle all marketing, sales and distribution services for Blu-ray, DVD, Electronic Sell-Through and TVOD platforms of STX Entertainment’s theatrical titles across North America.

     

    STX Entertainment, which handles its own production, marketing and distribution of its theatrical projects, is ramping up quickly and recently revealed it will release 12-15 major motion pictures a year beginning in 2016.

     

    STX Entertainment Motion Picture Group chairman Adam Fogelson said, “Universal has one of the most aggressive and inventive home entertainment teams in the industry. Their philosophy of being platform agnostic and allowing for growth in new and emerging areas of delivery is very exciting. We could not have more confidence in their ability to represent STX Entertainment’s new catalogue of motion pictures in the home entertainment marketplace.”

     

    Universal Pictures president and chief distribution officer Peter Levinsohn added, “STX will be an excellent complement to Universal’s exceptional portfolio of diverse home entertainment distribution partners. Robert Simonds is one of the most innovative and accomplished professionals in the film business and we are thrilled to join forces with him and his veteran team of talented executives in what we expect will be a long and successful collaboration.”

     

    This Universal agreement marks the second partnership announced by STX Entertainment, who in January of this year closed a multi-year output agreement with Showtime Networks to bring motion pictures distributed theatrically by STX exclusively to Showtime Networks during the premium television window. The deal covers the studio’s theatrical releases through 2019.

     

    STX has been ramping up production on its film slate and recently announced the first four motion pictures it will release theatrically. On 31 July, 2015, the studio will debut The Gift, a contemporary psychological thriller from Jason Blum’s Blumhouse, directed by Joel Edgerton and starring Jason Bateman, Rebecca Hall and Edgerton. Secret in Their Eyes will be released on 23 October, 2015. The thriller is written and directed by Billy Ray and stars Chiwetel Ejiofor, Nicole Kidman and Julia Roberts. On 22 January, 2016, STX will release The Boy, a horror film from director William Brent Bell, written by Stacey Menear and starring Lauren Cohan. And 11 March, 2016, brings the release of the epic action-drama The Free State of Jones, starring Matthew McConaughey, Gugu Mbatha-Raw, Keri Russell and Mahershala Ali from writer-director and four-time Academy Award nominee Gary Ross.