COS COB, CT – Chicken Soup for the Soul Entertainment, Inc. (“CSS Entertainment”) (Nasdaq: CSSE), a growing media company building online video-on-demand (“VOD”) networks that provides positive and entertaining video content for all screens, today announced the signing of a definitive agreement to acquire Pivotshare, Inc. (“Pivotshare”), a global subscription-based video-on-demand service (“SVOD”) offering channels online across a variety of categories including music, sports, religion, arts and culture, lifestyle and family, launching CSS Entertainment’s subscription video-on-demand business.
Pivotshare is comprised of a series of subscription-based VOD channels online with 28,000 hours of programming. The network generates approximately $2.5 million in annual revenue and has approximately 25,000 paid subscriptions with an average monthly revenue of $9 per subscription.
“This accretive acquisition of Pivotshare launches us into the subscription VOD space, significantly accelerating our business plan,” noted William J. Rouhana, Jr., chairman and chief executive officer. “This multi-channel online network comes with pre-existing content, much of which fits with the Chicken Soup for the Soul brand.”
“We are thrilled to become part of the Chicken Soup for the Soul Entertainment ecosystem,” stated Adam Mosam, founder of Pivotshare, Inc. “CSS Entertainment is strategically capitalizing on disruption in the entertainment industry, and Pivotshare will help accelerate the company’s growth and presence in the subscription-based VOD business while also bringing a top technology team to the company.”
The company primarily used perpetual preferred stock to complete this acquisition. “After our recent perpetual preferred stock offering, we decided to offer our Series A Preferred shares as an acquisition currency to the Pivotshare shareholders, and they agreed to accept $3.35 million of the $4.35 million purchase price (excluding closing costs) in the form of our perpetual preferred stock (Nasdaq: CSSEP),” stated Scott W. Seaton, vice chairman. “The balance of the purchase price is $257,000 in cash and 74,235 shares of CSS Entertainment common.”
“Pivotshare is expected to generate approximately $1 million per year in cost savings for CSS Entertainment, which is a 23% return on our investment annually,” noted Seaton. “Using preferred stock as an acquisition currency with a 9.75% coupon and focusing on accretive acquisitions like this one will substantially and rapidly grow our business while adding to our cash flow.”
“The acquisition of Pivotshare secures CSS Entertainment’s operations in the subscription VOD space earlier than projected, and allows us to deploy our already owned content libraries as subscription VOD services quickly and at little to no cost,” noted Rouhana.