Redbox Entertainment, the DVD and streaming company whose bright red kiosks were once a fixture of video entertainment, has agreed to be acquired by Crackle parent, Chicken Soup for the Soul Entertainment.
The $375-million all-stock deal, announced Wednesday, includes the assumption of Redbox's $325 million debt. It follows the company's filing with the SEC in April, which revealed it would be laying off 150 employees — or roughly 10% of its workforce — just six months after becoming a publicly traded company.
Redbox has struggled for years to hold its place in the digital war among streaming services. While its 38,000 DVD rental kiosks have welcomed people into virtually every grocery store and pharmacy in America for nearly two decades, the renaissance of physical media has seemed implausible.
In December 2020, the Oakbrook Terrace, Ill., company announced its ad-supported streaming service, Redbox on Demand. But the disruptor that once dethroned Blockbuster and other bricks-and-mortar video stores years ago has continued to stagger.
Although ad-supported subscriptions are not uncommon (i.e., HBO Max, Peacock, Paramount+), other media companies like Netflix and Disney+ have recently announced that they would be adding ad-supported tiers to their plans to help retain price-conscious consumers cutting the virtual cords on subscription services in recent years.
In a joint statement, Chicken Soup for the Soul and Redbox said they see the deal as a "transformative moment for the ad-supported streaming industry."
"We believe that Chicken Soup for the Soul Entertainment is the ideal partner for Redbox," said Redbox Chief Executive Galen Smith. "By joining forces, we will accelerate Redbox's transition from a physical to high growth digital media company and be the only entertainment provider truly focused on value for consumers."
Chicken Soup's acquisition of Redbox is a complement to its portfolio. The Connecticut company, which owns the bestselling series of self-help books, also owns and operates a variety of ad-supported video platforms, including Crackle, Truli, Popcornflix, Pivotshare, Españolflix and FrightPix.
The companies expect to close the deal by the second half of 2022, according to the announcement.
