Publishing company and content distributor Chicken Soup for the Soul Entertainment has agreed to buy DVD kiosk company Redbox for $375 million, the brands announced on Wednesday.
The deal includes $50 million in Chicken Soup stock as well as $325 million in debt. It comes less than a year after Redbox became a publicly-traded entity through its merger with a Special Purpose Acquisition Company (SPAC). Both companies saw a drop in their share price after the news was announced.
Chicken Soup said the deal is intended to help bolster its ad-supported streaming products. The company currently operates the free streaming service Crackle; Redbox launched its own ad-supported streaming service in 2020 in order to diversify its revenue, which has largely focused on its DVD-for-rent kiosk business.
“Our acquisition of Redbox will accelerate the scaling of our business as it combines complementary teams and services to create the streaming industry’s premier independent [ad-supported streaming service],” a Chicken Soup executive said in a statement on Wednesday.
Chicken Soup says it expects to distribute select titles from its Screen Media production company at Redbox’s 40,000 DVD-for-rent kiosks, which are located inside or in front of supermarkets, discount stores and gas stations. For the time being, the company expects to continue operating the Redbox kiosks while it builds on its streaming endeavors.
