Eros Sells STX Entertainment

Eros STX Global Corporation (ESGC) is selling its STX Entertainment subsidiary to an affiliate of The Najafi Companies for $173 million.

Upon closing, an affiliate of Najafi will acquire STX Entertainment through the purchase of all of the issued and outstanding shares of common stock of a parent entity of STX Entertainment and a wholly-owned subsidiary of ESGC. The purchase agreement also provides ESGC with a “go-shop period,” during which the board of directors of ESGC, with the assistance of financial advisor Lazard, will solicit alternative proposals from third parties for a period of 45 days.

The $173 million includes repayment of the indebtedness of STX Entertainment, which is currently about $148 million.

The agreement includes an addendum for ESGC to pay a termination fee of $4.5 million (plus the return of $2 million that Najafi has funded as a deposit) to Najafi if ESGC terminates the deal by accepting another proposal. Najafi will be required to pay ESGC a termination fee of $4.5 million (less the $2 million Najafi deposit) if Najafi fails to close the transaction.

A transaction is expected to close by the end of January 2022.