Indian movie producer and distributor Eros International on Saturday announced an all-share merger with Hollywood’s STX Entertainment to create an equally-held global entertainment company.
The six-year-old, privately-held STX has done 34 movies including ‘Hustlers’ and ‘Bad Moms’ which have cumulatively grossed $1.5 billion, while Eros focuses primarily on the Indian and diaspora markets by producing movies and distributing them through an OTT platform. 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 and it 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 newly constituted 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.
Kishore Lulla, Executive Chairman and CEO, Eros International said, “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.”
He continued, “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.”
“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,” Mr Lulla added.
Robert Simonds, Executive Chairman and Chief Executive Officer of STX Entertainment stated, “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.”
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. It has a deep global distribution network spanning 150+ countries with world-class partners and 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 the calendar year 2019.
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 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.