CuriosityStream Inc. and Software Acquisition Group, Inc. announced that they have entered into a definitive business combination agreement. Upon closing of the transaction, CuriosityStream common stock will be listed on the NASDAQ exchange under the ticker symbol “CURI”. The merger announcement was made today by John Hendricks, Chairman of CuriosityStream, and Jonathan Huberman, Chairman of Software Acquisition Group.
At the closing of the transaction the combined company will be well capitalized with zero debt and an estimated $180 million of cash on the balance sheet (assuming no redemptions of Software Acquisition Group stock). John Hendricks, founder of the Discovery Channel and former Chairman of Discovery Communications, will remain Chairman of the Board as well as the combined company’s largest shareholder. CuriosityStream will continue to operate under the current management team led by Clint Stinchcomb, President and CEO, a media executive with more than 25 years’ experience launching networks and developing and monetizing content, including as the key executive who launched Discovery’s digital networks.
In connection with signing the merger agreement, Software Acquisition Group secured a $25 million PIPE investment at $10.00 per share to support the business combination. The PIPE investment includes significant commitments from existing investors in CuriosityStream, insiders of Software Acquisition Group, existing Software Acquisition Group investors and new institutional investors.
“CuriosityStream has the unique advantage of being a ‘pure-play’ streaming media service that is not burdened with legacy linear TV assets in cable and broadcasting. Our consumer promise of offering premium factual content on demand in the new era of streaming has been enthusiastically embraced by curious viewers worldwide,” said John Hendricks, Founder and Chairman of CuriosityStream. “We are excited to now have access to the public capital markets to support our growth plans and to over-deliver on our mission to provide content that informs, enchants and inspires.”
“We are proud to combine with CuriosityStream,” commented Jonathan Huberman, Chairman and CEO of Software Acquisition Group. “CuriosityStream is the clear leader in the high growth factual media streaming market. We look forward to working with such a strong management team led by industry legend John Hendricks and his business partner of many years, Clint Stinchcomb, as they continue to drive CuriosityStream adoption across global markets. I am confident our investors will share my total respect for their vision and leadership.”
“I take great delight in working with John Hendricks. And through the combination of his vision and our veteran-led operating team, we are already generating significant revenue growth. We have built a compelling and elegant global factual streaming service for consumers and that is only one part of the story,” added Clint Stinchcomb, President and CEO. “Unlike nearly every other streaming service that is largely reliant on a single revenue stream, subscription or advertising, we are building five robust, interrelated but distinct business lines. This influx of capital from the sponsors and the Software Acquisition Group team will only accelerate our march to becoming the world’s pure factual solution for consumers, distributors, brands, associations and media partners.”
Key Transaction Terms
Pursuant to the business combination, a newly formed wholly-owned subsidiary of Software Acquisition Group will acquire CuriosityStream through a reverse merger at an enterprise value of approximately $331 million and equity value of approximately $512 million.
Assuming no redemptions of Software Acquisition Group public shares, CuriosityStream's existing shareholders will receive approximately 63% of the issued and outstanding shares of common stock of Software Acquisition Group immediately following the closing of the business combination and the founders of Software Acquisition Group will retain approximately 3% founder shares at closing, subject to customary closing adjustments. Existing Software Acquisition Group stockholders (other than the founders) and PIPE investors are expected to own 34% of the combined entity, upon closing. Following the consummation of the transaction, Software Acquisition Group will change its name to CuriosityStream Inc.
The respective boards of directors of CuriosityStream and Software Acquisition Group have unanimously approved the proposed business combination. Completion of the proposed business combination is expected in the fourth quarter of 2020. The transaction will be effected pursuant to the terms and conditions of the Agreement and Plan of Merger, entered into by CuriosityStream and Software Acquisition Group, and the other parties thereto, which contains customary closing conditions, including the clearance of a proxy statement by the Securities and Exchange Commission (“SEC”), approval by the shareholders of Software Acquisition Group, and certain regulatory approvals.
Stifel is acting as exclusive financial advisor to CuriosityStream. B. Riley FBR is acting as exclusive financial advisor and private placement agent to Software Acquisition Group. Arnold & Porter is serving as legal advisor to CuriosityStream and Kirkland & Ellis LLP is serving as legal advisor to Software Acquisition Group.
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