Fox Corporation completed its acquisition of Roku on Nov. 6, financing part of the transaction with $10.4 billion in borrowing as it adds a large streaming platform.
At closing, each eligible Roku Class A or Class B share converted into $95.30 in cash plus 0.9799 of a FOX Class A share; fractional FOX shares were paid in cash. Fox said it will pay about $14.1 billion in cash and issue approximately 144.5 million shares to former Roku shareholders. Those figures exclude vested or converted equity awards and shares subject to appraisal rights.
Fox drew $2 billion under an amended term loan agreement and $8.4 billion under a senior unsecured bridge facility. The Securities and Exchange Commission filing says the proceeds covered part of the cash consideration and other amounts payable in connection with the mergers. The bridge facility matures 364 days after closing and may be prepaid in full or in part. Fox also established a $1.5 billion unsecured revolving credit facility for general corporate purposes. It had no borrowings under that facility as of Nov. 6, but had issued about $29 million in letters of credit.
Fox said former Roku shareholders will hold about 26% of its common shares, with existing Fox shareholders holding about 74%. The company expanded its board to eight directors and appointed Roku's former chairman, president and CEO Anthony Wood as Co-Chair of FOX Digital Platforms. Fox's release said Roku shares would cease trading on Nasdaq as of Nov. 6. The closing followed shareholder votes approving the deal in October.
Fox projected roughly $400 million in run-rate cost synergies within two years of closing and said it expects the deal to increase free cash flow per share by the second full post-closing year. The company described the acquisition as a step toward expanding its business mix in streaming and connected TV. Fox said Roku's platform reaches more than 100 million households globally. Its release also identified combined indebtedness and the pace of debt reduction as risks.
