STX Entertainment and Indian movie major Eros International have closed their stock-for-stock merger, forming film and TV company Eros STX Global Corp., which looks to play in Hollywood, Bollywood and China.
The combined company “creates a financially robust global studio leader across three continents with strategic content and distribution partnerships for an unprecedented global footprint,” Eros said in a statement on Thursday, as it announced completion of the deal.
Eros added the combined entity will be capitalized with $125 million of new equity funding and a revamped $350 million JP Morgan-led credit facility. The new company, whose stock will trade on the New York Stock Exchange, has headquarters in Burbank and Mumbai. It has projected $50 million in cost-saving synergies within its first two years.
Eros also plans a global Eros STX brand and website to launch in September. The merged company’s senior leadership will be comprised of Eros’ Kishore Lulla as executive co-chairman; STX’s Robert Simonds as co-chairman and CEO; STX’s Andrew Warren as CFO; Eros’ Rishika Lulla Singh and STX’s Noah Fogelson as co-presidents; and Eros’ Prem Parameswaran as head of corporate strategy. Meanwhile, Adam Fogelson will remain chairman of STX Motion Pictures Group.
“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,” Simonds said when the deal was unveiled in April. “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.”
In an internal memo to STX staff, he said at the time that the deal would create “the first independent media company with the expertise and creative cultures of Hollywood and Bollywood, while also leveraging the important inroads both companies have made into the Chinese market.”
STX launched in 2014 as a home for midbudget film fare that larger studios had mostly abandoned in favor of tentpoles. During its independent run it released 34 movies, which grossed a combined $1.5 billion at the box office globally. The studio’s bigger theatrical earners include Bad Moms ($184 million), I Feel Pretty ($95 million), and Hustlers ($157 million). STX suffered multiple misses in 2019 though, including the big-budget animated Uglydolls ($32 million).
STX unveiled plans in 2018 for an initial public offering in Hong Kong, hoping to raise $500 million at a target valuation of $3.5 billion, but that didn’t come to fruition. The combination with publicly traded Eros now allows the company to have a stock market listing. The merged firm is expecting a market capitalization of around $1 billion.
The deal will provide the Eros Now streaming platform with new content to add to its library. Eros, which touts itself as having “Bollywood’s Biggest Movie Collection,” boasts a library of 3,000 films and the rights to 12,000 titles on Eros Now.