Chicken Soup for the Soul Entertainment Signs Definitive Agreement to Acquire Sonar Entertainment Assets - Seite 2

Screen Media will distribute Sonar’s extensive film and television library after the closing. The library of over 1,000 titles, over 4,000 hours of programming, ranging from classic shorts of Little Rascals, Laurel & Hardy and Blondie (produced by Hal Roach Studios) to acclaimed epic event mini-series such as Lonesome Dove and Dinotopia (produced by RHI, Robert Halmi International). Over $1 billion in the aggregate is estimated to have been invested in the library and television content development pipeline being acquired. Sonar’s library titles have received 446 Emmy Award nominations, 105 Emmy Awards and 15 Golden Globe Awards. The library includes hundreds of movies that originally premiered on the Hallmark, Lifetime and Showtime networks. Sonar’s sales and distribution team have licensed the library content to more than 300 clients in over 125 territories worldwide in addition to the U.S. and Canada. “Chicken Soup for the Soul Entertainment and Screen Media are the perfect partners for maximizing this library’s potential far into the future. So much of this catalog is a perfect fit for the current and emerging AVOD-driven markets in the U.S. and abroad,” said David Ellender, CEO of Sonar Entertainment.

The asset purchase agreement is structured such that consideration paid is directly related to the success of the acquired assets. An advance payment will be made to the seller at closing, to be recouped by Chicken Soup for the Soul Entertainment upon the sale or licensing of certain television rights. The company has secured committed financing for the transaction. In addition, the seller will receive 5% of the ownership of a new AVOD network that will be created in part with the Sonar library. In the first year after closing, Chicken Soup for the Soul Entertainment expects to recognize over $15 million in revenue with contribution of approximately $10 million in EBITDA from the Sonar assets. The company anticipates significant expansion of revenue and EBITDA from Sonar’s valuable television content development pipeline beginning in 2022.

The acquisition is subject to satisfaction of certain closing conditions and is expected to close in 30 days.

HCFP/Strategy Advisors LLC acted as sole advisor to Chicken Soup for the Soul Entertainment in this transaction. FTI Capital Advisors LLC acted as exclusive financial advisor to Sonar in connection with the transaction. Latham & Watkins LLP acted as legal counsel for Sonar in connection with the transaction. Brian Ross of Graubard Miller acted as legal counsel for Chicken Soup for the Soul Entertainment.