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STX Entertainment has agreed to a stock-for-stock merger with India’s Bollywood movie major Eros International to form a combined film and television firm, the companies said Friday.
The new company, which will be traded on the New York Stock Exchange, will be titled Eros STX Global Corp and will release 40 feature films and more than 100 TV episodes in 2020 alone. The merger is expected to close in the second quarter of this year, and the firm will have headquarters in Burbank and Mumbai.
Post-merger, the entity will have access to $125 million from equity investors including TPG, Hony Capital and Liberty Global. The companies said that that the combined firm includes $264 million of pro forma net debt and $195 million of pro forma cash balance. Eros STX projects $50 million in cost-saving synergies within its first two years.
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,” STX CEO Robert Simonds said in a statement, adding, “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 on Friday, Simonds said the deal creates “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 2016’s Bad Moms ($184 million) and 2018’s I Feel Pretty ($95 million), as well as last year’s Hustlers ($157 million) and Guy Ritchie’s The Gentlemen ($115 million) this winter. It also picked up a box office win after distributing the former Weinstein Co. title The Upside, which grossed $125 million last year.
However, STX suffered multiple misses in 2019, including the big-budget animated bet Uglydolls ($32 million), Poms ($16 million) and The Best of Enemies ($10 million), and multiple executives left the company last year, including chief content officer Oren Aviv. Amid the novel coronavirus pandemic that has shuttered movie theaters worldwide, STX sold the comedy My Spy to Amazon this month after a brief run internationally.
Kishore Lulla, executive chairman and CEO of Eros International, touted the STX deal by noting the combined firm will provide the Eros Now streaming platform with new content to add to its library for its 26.2 million paying subscribers. 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.
“We are thrilled to join with STX Entertainment as this represents a landmark step in our company’s transformation,” said Lulla. “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 multiyear output deals, strategic alliances and our market-leading Eros Now streaming platform.”
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