Redbox, an American video rental company specializing in DVD, Blu-ray and 4K UHD rentals via automated retail kiosks., has entered into a definitive agreement to combine with Seaport Global Acquisition Corp., a publicly traded special purpose acquisition company. The transaction will result in Redbox becoming a publicly traded company with an enterprise value of $693 million. Upon closing, Redbox’s common stock is expected to trade on Nasdaq under the ticker symbol “RDBX.”
As part of the transaction, all existing shareholders will roll 100 percent of their equity in Redbox, including funds managed by affiliates of Apollo Global Management Inc., which acquired Redbox through the acquisition of Outerwall in September 2016. Upon close of the combination, these existing shareholders will hold approximately 59 percent of the outstanding common stock.
Galen Smith, CEO of Redbox, said, “Redbox has built one of the most trusted brands in entertainment by consistently delivering on three core tenets: value, convenience and simplicity. Today’s announcement brings us one step closer to building an entertainment ecosystem and underscores our steadfast commitment to enhancing our customer value proposition. We are pleased that Seaport Global Acquisition shares our confidence in the opportunities ahead and are grateful for their team’s expertise and support. In Redbox’s next chapter as a public company, we will be focused on delivering a differentiated, affordable entertainment experience for our millions of loyal customers, and seeking profitable growth for shareholders.”
Stephen Smith, chairman and CEO of Seaport Global Acquisition, said, “We’ve long admired Redbox’s team for the incredible reputation they’ve established in the industry, as well as the innovative, scalable business model they’ve built. Over the past year in particular, the resilience Redbox has demonstrated through the challenges associated with the COVID-19 pandemic reaffirms our confidence in the value and growth potential of the business. We are thrilled to partner with Redbox’s team as they work to transform in-home entertainment and deliver long-term growth.”
The transaction, which values Redbox at an enterprise value of $693 million, will be funded by a combination of $145 million of cash held in the trust account of Seaport Global Acquisition, and a fully committed PIPE of $50 million led by Ophir Asset Management.
B. Riley Securities is acting as capital markets advisor to Seaport Global Acquisition and lead placement agent on the PIPE. BTIG LLC is acting as lead financial advisor and capital markets advisor to Redbox. Moelis & Company LLC is also serving as a financial advisor to Redbox. Apollo Global Securities and BTIG LLC also served as placement agents on the PIPE. Paul Hastings LLP is acting as legal advisor to Seaport Global Acquisition. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Redbox. Kirkland & Ellis LLP acted as legal advisor to the placement agents.