John Hendricks’ CuriosityStream Enters Into $331M Reverse Merger to Become a Publicly Traded Company

CuriosityStream, the nonfiction streaming company headed by Discovery Channel founder John Hendricks, is going public through a reverse merger with a firm set up to execute just such a roll-up deal.

CuriosityStream is combining with Software Acquisition Group Inc., a special purpose acquisition company that raised about $150 million in November 2019. The merger is valued at $331 million, with the new entity carrying an equity value of approximately $512 million, according to the companies.

Technically, Software Acquisition Group is acquiring CuriosityStream (and the new company will adopt the CuriosityStream name). Following the deal closing, Hendricks will remain chairman as well as the combined company’s largest shareholder.

Launched in 2015, CuriosityStream says it now has more than 13 million paying subscribers worldwide for the service, which offers an array of 3,100-plus titles including original docuseries, films and specials spanning science, nature, history, technology, society and lifestyle.

“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,” said 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.”

The boards of CuriosityStream and Software Acquisition Group have unanimously approved the proposed deal, which is expected to close in the fourth quarter of 2020. The transaction is subject to usual closing conditions, including regulatory approvals and approval by the shareholders of Software Acquisition Group.

When the deal closes, CuriosityStream’s common stock will be listed on NASDAQ under the ticker symbol “CURI.”

Existing CuriosityStream shareholders, which include Hendricks, Blum Capital Ventures and TimesSquare Capital Management, will contribute all of their equity into the combined company. The reverse-merger deal will put around $180 million of cash on CuriosityStream’s balance sheet — and the new company will have zero debt, according to the parties. The cash will include a $25 million private investment in public equity (PIPE) tranche with shares priced at $10 each; the PIPE investment will include “significant commitments” from existing investors in CuriosityStream, Software Acquisition Group insiders and existing investors and new institutional investors.

CuriosityStream will continue to operate under the current management team led by president/CEO Clint Stinchcomb, formerly head of Discovery’s digital networks.

Software Acquisition Group is a “blank check company,” formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The company is led by chairman/CEO Jonathan Huberman and VP of acquisitions Mike Nikzad and members of the board include Andrew Nikou, Stephanie Davis, Peter Diamandis, Steven Guggenheimer and Matt Olton.

“We are proud to combine with CuriosityStream,” Huberman said in a statement. “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.”

CuriosityStream’s SVOD service is $2.99 per month or $19.99 per year, available directly from the company and through distribution partners including Comcast Xfinity, Apple TV, Amazon Prime Channels, Sling TV, YouTube TV, Cox, Dish, and T-Mobile.

In addition, CuriosityStream has entered into deals for bundled distribution plans with partners including Altice USA and Frndly TV in the U.S., StarHub in Singapore, Totalplay in Mexico, Gazprom and OKKO in Russia, Millicom in Latin America, Liberty Global’s Flow TV in the Caribbean, REV TV on Cable Bahamas, Multichoice’s DStv in Africa, Sky New Zealand, MediaNet in Maldives, and Com Hem in Sweden.

CuriosityStream’s programming lineup includes natural history specials such as “Light on Earth,” hosted by David Attenborough, science and technology series “Dream the Future” narrated by Sigourney Weaver, lifestyle series “The History of Home” narrated by Nick Offerman, and BBC history series “Empire of the Tsars.”

Of the SVOD service’s 3,100 titles, over 900 are exclusive originals. Within five years, according to the company, CuriosityStream projects it will have amassed a streaming library with more than 11,000 original and licensed premium nonfiction titles.