The troubled marriage between STX Entertainment and Eros is dissolving.
The Najafi Companies announced Tuesday that it has reached an agreement to acquire the studio behind “Bad Moms” and “Hustlers” from Eros STX Global Corporation. The transaction is expected to close by the end of January 2022.
As part of the deal, an affiliate of Najafi will acquire STX Entertainment through the purchase of all of its issued and outstanding shares of common stock. Najafi has partnered with The Forest Road Company. Shares of ErosSTX were trading at less than 40 cents. The company has been threatened with delisting because of its depressed share price. STX had previously tried and abandoned an effort to go public on the Hong Kong stock exchange in 2018, citing unfavorable market conditions. In 2020, it merged with Eros, an Indian media company. STX was formed with the goal of making mid-budget films such as comedies and dramas that major studios had abandoned in favor of comic book adaptations and franchises, but it struggled to field many breakout hits.
Najafi Companies is a Phoenix-based private-equity firm run by Jahm Najafi, the vice chairman of the Phoenix Suns. Najafi previously tried to land Time Inc. when it was up for sale in 2017.
“This is a complicated, international public company carve-out transaction, and after countless hours over the past several months, we are thrilled to announce this new chapter with STX,” said Najafi. “First and foremost, we believe in the power of storytelling and fostering an entertainment studio that is artist-friendly and supportive of storytellers. We are also happy to exclusively partner with The Forest Road Company on this new and multi-faceted endeavor given their expertise and partnership approach.”