Redbox Entertainment Stock Tanks 40% On Merger Deal With Chicken Soup For The Soul Entertainment

Shares of Redbox Entertainment Inc. (RDBX) tanked 40% on Wednesday morning after Chicken Soup for the Soul Entertainment, Inc. (CSSE) announced a deal to acquire Redbox.

RDBX is currently trading at $3.36, down $2.24 or 40.00%, on the Nasdaq. The stock opened its trading at $2.89 after closing Tuesday's trading at $5.60.

Under the terms of the agreement, which has been approved by the Boards of Directors of both companies, Redbox stockholders will receive a fixed exchange ratio of 0.087 of a share of class A common stock of Chicken Soup for the Soul Entertainment per Redbox share.

Following the close of the transaction, Chicken Soup for the Soul Entertainment stockholders will own approximately 76.5% of the combined company, and Redbox stockholders will own approximately 23.5% of the combined company.

Chicken Soup said the deal is expected to be accretive to adjusted EBITDA in 2023. It expects to deliver annual-run rate cost synergies in excess of $40 million in 2023. Chicken Soup for the Soul Entertainment expects that the combined company will exit 2022 with a run-rate exceeding $500 million of revenue and $100 - $150 million of Adjusted EBITDA.

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