Eros Int’l and STX Entertainment join hands to create content & distribution company

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 a global reach and unique positions in the United States, India and China.

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 20 years.

The combined company, to be called Eros STX Global Corporation, will have a robust pipeline of feature length films and episodic content with well-established positions in the world’s fastest-growth global markets.

The combined company, with $125 million of incremental equity, will boast of 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,” said Kishore Lulla, Executive Chairman and Chief Executive Officer of Eros International.

“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.”

Lulla further said, “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.”

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.”

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.

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.