Eros merges with US filmmaker STX
By MYBRANDBOOK
Eros International Plc, Indian movie producer is merging with U.S. filmmaker STX Entertainment in an all-stock deal that brings together Bollywood and Hollywood.
The combined company, to be recognised as Eros STX Global Corp., will be publicly traded and have a valuation of more than $1 billion, including debt. Eros’s New York-listed stock jumped as much as 77%, and closed a $3.05 in New York.
The transaction was signed virtually by an exchange of signature pages between lawyers, the people said. Eros founder Kishore Lulla said his long-standing relationship and trust in his STX counterpart Robert Simonds, for whom his daughter was once an intern, was key to getting a deal completed under unusual circumstances.
“I was always a believer that technology is going to change the studio model and everything is going to shift to digital,” said Lulla, who will be co-chairman alongside Simonds. “Covid escalated that digital model.”
In the last four to six weeks, the amount of time users spend on the platform jumped between 50% and 200%, Lulla said. The team Eros STX Global Corp. will give the two firms heft to compete with bigger studios as trends sweeping Hollywood have made it hard for smaller players to gain scale.
But both companies have had their struggles over the years, and it’s too early to tell how much the combination will resolve them. The deal will give the company a bigger geographical footprint.
The combined company will have $600 million in pro forma revenue for 2019 and $300 million of “highly predictable” future revenue from STX films that have already been released. There will be about $50 million in operating synergies.
The company will be domiciled in the Isle of Man with joint headquarters in Maharashtra, India and Burbank, California. The deal comes less than two years after STX, which is backed by internet giant Tencent Holdings Ltd., shelved its IPO plans.
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