Redbox, the company best known for its DVD rental stands, said Monday it’s going public in a deal with Seaport Global Acquisition Corp., a special purpose acquisition company. The deal values Redbox at $693 million.
Redbox is expected to use some of its funding to pay off debt and make further investments in its business. The company, which said on Monday it has 39 million customers, will have about $209 million in cash after the deal closes.
“Today’s announcement brings us one step closer to building an entertainment ecosystem and underscores our steadfast commitment to enhancing our customer value proposition,” Redbox CEO Galen Smith said. “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.”
The company will trade on Nasdaq under the ticker symbol RDBX once the deal closes. Beyond its DVD rental business, Redbox is also looking to build a subscription video service. Additionally, Redbox said it will focus more on its original content, aiming to expand to about 36 original releases per year (the company currently has 16 exclusives under its umbrella).
“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,” Seaport CEO Stephen Smith said in a statement. “We are thrilled to partner with Redbox’s team as they work to transform in-home entertainment and deliver long-term growth.”
All existing shareholders will roll 100% of their equity into Redbox as part of the deal. That includes the funds managed by Apollo Global Management, which acquired Redbox in 2016. Those shareholders will hold about 59% of the company’s common stock once the SPAC starts trading.