Screen Media Parent Chicken Soup For The Soul Entertainment Acquires 1091 Pictures In $15.6M Indie Combo

EXCLUSIVE: Chicken Soup for the Soul Entertainment, whose subsidiaries include specialty film distributor Screen Media, is acquiring 1091 Pictures.

The purchase price of $15.55 million consists of $8 million in cash, $2 million in newly issued shares of Series A perpetual preferred stock and 375,000 shares of Class A common stock. The preferred shares were valued at $25 in the deal, and the common stock at $14.80.

In addition to creating a bulked-up specialty film distributor, the deal will provide a significant boost for Chicken Soup’s streaming operation. The company is among the leaders in ad-supported streaming, operating Crackle, Popcornflix and other services. It bought Screen Media in 2017 and plans to combine 1091 with that existing business unit.

Sony launched 1091 as a film and TV subsidiary of The Orchard in 2015. It rebranded as 1091 in 2019.

The roughly 4,000 movies and TV series in the 1091 vault range across many genres. Included are acclaimed documentaries like The Ghost of Peter Sellers, Linda Ronstadt: The Sound of My Voice and A Kid From Coney Island; Taika Waititi’s early-career indies What We Do In The Shadows and Hunt for the Wilderpeople; crowd-pleasers like The Last Blockbuster and Pharma Bro; and UFO stories Close Encounters of The Fifth Kind and The Phenomenon.

The output from 1091, estimated to be 300 titles a year, will offer new distribution opportunities but has an orientation toward streaming. Screen Media is already the primary supplier to the ad-supported networks under its own corporate tent.

Also coming aboard in the deal are 1091’s portfolio of free, ad-supported TV networks and AVOD channels, which draw a combined 1 billion yearly ad impressions.

Chicken Soup said it expects to recognize in excess of $10 million of revenue with approximately $3 million of incremental EBITDA in the next 12 months as a result of the transaction.

For the company, the deal extends a string of scrupulously executed M&A transactions. The company bought Screen Media in 2017 for $4.9 million in cash and a small amount of stock after it had hit the market at an exponentially higher valuation based on its library. Similarly, the company wound up acquiring full control of Crackle through a multi-step process after Sony decided it wanted to step away from running the ad-supported streaming service. The deal involved preferred shares, but essentially was cash-free and far below the valuation in the hundreds of millions Crackle would command in the open market.

Last year, Chicken Soup swung a deal to acquire Sonar Entertainment, paying just $19.5 million up front for the well-established production entity run by Robert Halmi Sr. About $1 billion had been invested into film and TV projects controlled by Sonar, the companies said at the time of the deal. Sonar’s slate includes current series are Hunters on Amazon Prime Video and the soon-to-premiere Mysterious Benedict Society on Disney+.

“The 1091 Pictures team transformed their large content library into a scalable, modern distribution platform with a compelling slate of channels that are a pragmatic addition to our existing assets,” said David Fannon, president of Screen Media Ventures. “There are great synergies between our two companies. Over time, joining 1091’s acquisition and distribution team with Screen Media’s team, leveraging the impressive infrastructure 1091 built for digital fulfillment, and folding the 1091-owned channel business into the Crackle Plus network, will make this a mutually beneficial and smooth transition.”

Elana Sofko, chief strategy officer for Chicken Soup for the Soul Entertainment, described the transaction as “the next evolution in our content library strategy.” She added, “The genre content with loyal fan bases from 1091 Pictures includes music, over a dozen different sports, paranormal, and much more, enabling us to continue to grow both our streaming services and our FAST channels. We will also continue growing the business that the 1091 Pictures team started and augment it with additional opportunities from the combined catalogue.”

“We are thrilled to be joining forces with the Chicken Soup for the Soul Entertainment and Screen Media team,” said Eric Min, general manager and head of content for 1091 Pictures. “We are bullish that the scale and reach of the combined teams starts us on an exciting journey to be able to further capitalize on this strong amalgamation of assets.”

Salem Partners was the exclusive financial and investment banking advisor to 1091 Pictures, with Ivar Combrinck leading negotiations. Lisa Weiss from Chatillon Weiss acted as exclusive legal advisor to 1091 Pictures. Brian Ross from Graubard Miller was legal advisor to Chicken Soup for the Soul Entertainment.