Redbox Closes Merger With SPAC Seaport Global, Confirms IPO For Monday
Redbox, the 19-year-old entertainment mainstay known for its network of disc-dispensing kiosks, will become a public company on Monday.
The company confirmed the date of its long-planned initial public offering after closing its merger with special-purpose acquisition company Seaport Global. The SPAC deal, announced last May, values the combined company at $693 million.
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The network of 40,000-some Redbox kiosks outside grocery stores and other retailers isn’t likely to disappear anytime soon despite the decline of physical disc sales. Data from nearly two decades of kiosk transactions is being used to guide decisions in the company’s expanding production and acquisition arm. It is also informing the rollout of streaming services using transactional on-demand and free, ad-supported models.
At a special meeting on Wednesday, the boards of directors for both companies approved the combination. The combined company will be known as Redbox Entertainment Inc., and its stock will trade on the Nasdaq under the ticker symbol RDBX.
The merger transaction, along with private equity and institutional investments, will yield $88 million in cash. Redbox said it plans to use those funds to pay down existing debt, pay transaction costs and fees, fund growth investments, and for general corporate purposes.
There were a bit more than 12.3 million shares redeemed, giving the soon-to-be-public company about 45.4 million shares outstanding. Of those, some 2 million will be immediately tradeable.
“Today marks the beginning of Redbox’s next chapter,” CEO Galen Smith said. “Since revolutionizing the way Americans rent movies nearly two decades ago, Redbox has continuously evolved and expanded our reach – all while offering our millions of loyal customers exceptional value in home entertainment. Today, we are building on our legacy and reaffirming our commitment to delivering a wide range of choice and convenience for consumers, as well as value for our Redbox stakeholders.”
The IPO, Smith added, will enable Redbox to build more momentum in digital. “Through this transaction, and the incremental capital it provides, Redbox is equipped to advance our goal of creating a one stop experience that spans multiple entertainment mediums and simplifies the streaming experience,” he said.
Redbox was founded in 2002 by business development execs at McDonald’s. The fast-food giant retained a large stake in the company until 2009.
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