TIDMBOOM
RNS Number : 6540E
Audioboom Group PLC
13 February 2018
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR")
13 February 2018
Audioboom Group plc
("Audioboom" or the "Company")
Proposed acquisition, suspension of trading and trading
update
Related party transaction with Candy Capital Limited
The Board ("Board") of Audioboom (AIM: BOOM), the leading spoken
word audio on-demand platform, announces the Company's intention to
acquire the entire issued share capital of Triton Digital Canada
Inc ("Triton"), the parent company of Triton Digital, Inc., for a
cash consideration of US$185 million, (approximately GBP134
million), subject to adjustment for normalised working capital (the
"Proposed Acquisition"). Triton is a leading technology provider to
the online audio industry that is headquartered in the USA with
offices in six locations. Further information on Triton can be
found below.
In order to fund the Proposed Acquisition and to provide working
capital for the Company and its subsidiaries following the Proposed
Acquisition (the "Enlarged Group"), the Company is proposing to
raise approximately GBP155 million, before expenses, through a
proposed placing of new ordinary shares (the "Proposed Placing").
Cenkos Securities plc and Zeus Capital Limited have been appointed
to act alongside Allenby Capital Limited as joint brokers to the
Proposed Placing (the "Brokers").
The Proposed Acquisition would constitute a reverse takeover
under rule 14 of the AIM Rules for Companies (the "AIM Rules"). The
Proposed Acquisition will be subject, inter alia, to shareholder
approval, the entering into and completion of a share purchase
agreement and raising the funds necessary to finance the Proposed
Acquisition via the Proposed Placing. As such, there is no
certainty that the Proposed Acquisition will proceed nor any
certainty regarding the terms on which it would proceed.
In conjunction with admission of the enlarged share capital to
trading on AIM ("Admission"), the Company intends to perform a
consolidation of its ordinary shares and change the name of the
Company to Triton Digital Group plc.
Suspension of trading
As the Proposed Acquisition would constitute a reverse takeover
under the AIM Rules, then should the Proposed Acquisition proceed
the approval of shareholders of the Company in a general meeting
will be required. As such, a further announcement with full details
of the Proposed Acquisition would be issued at the appropriate time
once binding contracts are entered into and an admission document
published and sent to shareholders with a notice of general
meeting.
In accordance with rule 14 of the AIM Rules, the Company's
ordinary shares will be suspended from trading on AIM with effect
from 7:30 a.m. today. The Company's ordinary shares will remain
suspended until such time as either an admission document is
published or an announcement is released confirming that the
Proposed Acquisition is not proceeding. The Company will update
shareholders as and when appropriate.
Information on Triton
Launched in 2006 and providing services in over 40 countries,
the Directors believe Triton to be one of the largest technology
and service providers to the online audio industry. Triton's
offering represents a broad suite of audio technology services and
tools that support over-the-air, online and on-demand audio
publishers.
Triton's software as a service based offering includes three
main product lines:
-- audience measurement;
-- streaming platform and services; and
-- audience engagement.
Triton has a strong penetration of the US radio broadcaster
market that, according to a report published by the Radio
Advertising Bureau on 3 March 2016, represents an approximately
US$17.5 billion market based on annual advertising.
The Directors believe that the Proposed Acquisition presents an
opportunity to combine leading audio infrastructure, metrics and
ad-serving companies that service the expanding global live and
on-demand publisher base. The Directors are of the view that there
are natural synergies between the businesses within the proposed
Enlarged Group, with complementary functionality, cumulative client
bases and global enterprise and consumer footprints. The Directors
also believe that the proposed Enlarged Group has the potential to
be a leading global digital audio services provider to both live
and on-demand publishers, with the scale and reach to capture a
significant share of the revenues available within the global
online audio industry as a whole.
For the year ended 31 December 2016, Triton recorded audited US
GAAP turnover of approximately US$40.9 million and audited US GAAP
EBITDA of approximately US$9.0 million (excluding non-recurring
items). The audited US GAAP net assets of Triton as at 31 December
2016 were approximately US$21.2 million. For the nine months ended
30 September 2017, Triton recorded audited US GAAP turnover of
approximately US$29.8 million and audited US GAAP EBITDA of
approximately US$10.5 (excluding non-recurring items). As at 30
September 2017, the audited US GAAP net assets of Triton were
approximately US$20.7 million.
The Brokers will today publish hard copy numbered research notes
on the Enlarged Group.
Proposed Board changes
Upon Admission, it is proposed that Neal Schore and Mark
Rosenbaum, who are, respectively, the current President and Chief
Executive Officer and the Executive Vice President and Chief
Financial Officer of Triton, will join the Board as; (i) President
and Chief Executive Officer; and (ii) Executive Vice President and
Chief Financial Officer, respectively. It is proposed that Robert
Proctor (current Chief Executive Officer of the Company) will
remain as an Executive Director upon Admission. It is further
proposed that a number of additional Non-Executive Directors, who
have significant experience in the media and digital audio
industries, will also join the Company's Board. Further relevant
information regarding the proposed directors and the board
structure of the Enlarged Group will be announced following the
execution of a definitive share purchase agreement.
Additional information
The Company is party to an offer letter (the "Offer Letter")
with Triton and Triton's controlling shareholder, Vector Triton
Holdings (Cayman) 2, L.P. (the "Vendor"), in respect of the
Proposed Acquisition. The Offer Letter does not contain exclusivity
provisions, although it does contain binding provisions in respect
of the payment of fees if the parties withdraw from the Proposed
Acquisition under certain circumstances.
In the event that the Proposed Acquisition does not proceed, the
Company may be obliged to pay certain fees to the Vendor or Triton
and the Board believes that the Company would need to undertake a
fundraising in the short-term for working capital purposes,
including any abort costs associated with the Proposed
Acquisition.
A further announcement will be made in due course.
Trading update
Audioboom's current financial year commenced on 1 December 2017.
During the first two months of the first quarter the Company's
revenues and trading performance have been ahead of management's
expectations.
The total available ad impressions for the first two months of
Q1 were 422 million (full Q1 2017: 304 million). Importantly, "live
read" or "host read" available ad inventory for the two months
totalled 150 million, representing an improving run-rate that is
well ahead of the Q4 2017 total of 208.5 million. Total content
channels were also up at 12,495 (12,426 at end of November
2017).
The roster of Audioboom Original Network productions continues
to develop well, with second seasons of "The 45(th) ", "Blank
Check", "Deliberations". "InBox", "It's Happening with Snooki &
Joey", and "Mission to Zyxx" all now available. Additionally,
Audioboom's latest shows - "Night Call", "Empty Frames" and "Mafia"
- were released on 5, 6 and 7 February 2018 respectively.
Given that the Company derives the majority of its revenues in
US Dollars yet currently reports its results in Sterling, the
recent strengthening of the Pound against the US Dollar will
potentially impact the results of the existing business versus
Sterling based market expectations. The Board proposes to move to
reporting in US Dollars going forward.
Related party transaction
Since the departure of the Company's former chief financial
officer on 27 July 2017, various financial and accounting services
have been provided under contract by an individual provided by
Candy Capital Limited ("Candy Capital"). Candy Capital is 100 per
cent. owned by Nick Candy, who is also a 90 per cent. shareholder
of Candy Ventures SARL, which currently holds more than 10 per
cent. of the Company's ordinary shares. Accordingly, Candy Capital
is classified as a related party under the AIM Rules. The aggregate
fees invoiced to the Company by Candy Capital in respect of the
above has, as at 12 February 2018, reached GBP67,500, excluding
value added tax, which constitutes a related party transaction
under rule 13 of the AIM Rules (the "Related Party Transaction").
Steven Smith, a director of the Company, is also a director and 10
per cent. shareholder of Candy Ventures SARL and accordingly he too
is classified as a related party of Audioboom. The Company's
directors (excluding Steven Smith) consider, having consulted with
the Company's nominated adviser, Allenby Capital Limited, that the
terms of the Related Party Transaction are fair and reasonable
insofar as the Company's shareholders are concerned.
Important notice
This announcement is for information purposes only and is not
intended to and does not constitute, or form part of, any offer or
invitation to purchase, subscribe for or otherwise acquire or
dispose of, or any solicitation to purchase or subscribe for or
otherwise acquire or dispose of, any securities in the United
States, Republic of South Africa, Australia, Canada or Japan or any
other jurisdiction in which such an offer or solicitation may lead
to a breach of any applicable legal or regulatory requirements.
Persons needing advice should consult with an independent financial
adviser authorised under the Financial Services and Markets Act
2000, as amended ("FSMA"), who specialises in advising on the
acquisition of shares and other securities, if that person is in
the United Kingdom, or any appropriately authorised person under
applicable laws, if that person is located in any other
jurisdiction. The information contained in this announcement is not
for release, publication or distribution to persons in any
jurisdiction where to do so might constitute a violation of local
securities laws or regulations.
This announcement has been issued by and is the sole
responsibility of the Company. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. The information in this announcement is
subject to change without notice.
The distribution of this announcement in certain jurisdictions
may be restricted by law. No action has been taken by the Company
or the Brokers that would permit an offering of such shares or
possession or distribution of this announcement or any other
offering or publicity material relating to such shares in any
jurisdiction where action for that purpose is required, other than
the United Kingdom. Persons into whose possession this announcement
comes are required by the Company and the Brokers to inform
themselves about, and to observe, such restrictions. The
information contained in this announcement may not be distributed,
published, reproduced, transmitted or otherwise made available in
whole or in part or disclosed by recipients to any other person and
may not be reproduced in any manner whatsoever. Any forwarding,
distribution, reproduction, or disclosure of any information
contained in this announcement in whole or in part is unauthorised.
Failure to comply with these restrictions may constitute a
violation of the US Securities Act of 1933, as amended or the
applicable laws of other jurisdictions. Subject to certain
exemptions, the securities referred to in this announcement may not
be offered or sold in the United States, Australia, Canada, Japan,
South Africa or certain other jurisdictions or for the account or
benefit of any national resident or citizen of certain
jurisdictions. No prospectus will be made available in connection
with the matters contained in this announcement and no such
prospectus is required to be published. Persons needing advice
should consult an independent financial adviser.
Allenby Capital Limited ("Allenby Capital"), which is authorised
and regulated in the United Kingdom by the FCA is acting as
nominated adviser and joint broker to Audioboom in connection with
the transaction referred to in this announcement. Allenby Capital
is acting exclusively for Audioboom and no one else in connection
with the transaction and will not be responsible to anyone other
than Audioboom for providing the protections afforded to clients of
Allenby Capital or for providing advice in relation to the
transaction or the contents of this announcement or any
transaction, arrangement or matter referred to herein.
Cenkos Securities plc ("Cenkos"), which is authorised and
regulated in the United Kingdom by the FCA is acting as joint
broker to Audioboom in connection with the transaction referred to
in this announcement. Cenkos is acting exclusively for Audioboom
and no one else in connection with the transaction and will not be
responsible to anyone other than Audioboom for providing the
protections afforded to clients of Cenkos or for providing advice
in relation to the transaction or the contents of this announcement
or any transaction, arrangement or matter referred to herein.
Zeus Capital Limited ("Zeus Capital"), which is authorised and
regulated in the United Kingdom by the FCA is acting as joint
broker to Audioboom in connection with the transaction referred to
in this announcement. Zeus Capital is acting exclusively for
Audioboom and no one else in connection with the transaction and
will not be responsible to anyone other than Audioboom for
providing the protections afforded to clients of Zeus Capital or
for providing advice in relation to the transaction or the contents
of this announcement or any transaction, arrangement or matter
referred to herein.
Enquiries:
Audioboom Group plc
Rob Proctor, Chief Executive Tel: +44(0)20 7403
Officer 6688
Allenby Capital Limited (Nominated Tel: +44(0)20 3328
adviser and joint broker) 5656
David Hart / Nick Athanas /
Alex Brearley / Asha Chotai
Cenkos Securities plc (joint Tel: +44(0)20 7397
broker to the Proposed Placing) 8900
Stephen Keys / Mark Connelly
/ Callum Davidson / Nick Searle
Zeus Capital Limited (joint Tel: +44(0)20 3829
broker to the Proposed Placing) 5000
Nicholas How / Ben Robertson
/ Richard Short / John Goold
Walbrook PR Limited (PR & IR Tel: +44(0)20 7933
Advisers) 8780
Paul Cornelius / Sam Allen or audioboom@walbrookpr.com
About Audioboom
Audioboom is a global podcasting platform that consolidates the
business of on-demand audio, making content accessible,
wide-reaching and profitable for podcasters, advertisers and
brands. Audioboom operates internationally, with operations across
North America, Europe, Asia, Australia and Latin America, and
addresses the issue of disparate podcast services by putting all of
the pieces of the puzzle together under one umbrella, creating a
user-friendly, economical experience.
Audioboom hosts more than 12,000 content channels, with key
content partners including Associated Press (US), "Athletico Mince"
(UK), The BBC (UK), Cumulus Media (US) , Edith Bowman (UK), "The
Heart of It with Estée Lalonde" (UK), India Today (India), "News
Roast" (UK), "No Such Thing As A Fish" (UK), Red FM (India), "The
Totally Football Show" (UK), "Untold: The Daniel Morgan Murder"
(UK), "Undisclosed" (US) and Westwood One (US).
Original content produced by Audioboom includes "The 45th" (US),
"I Almost Knew That" (India), "Corinne Bailey Rae: The Heart Speaks
in Whispers" (UK), "Ctrl Alt Win Podcast" (India), "Deliberations"
(US), "InBox (US), "It's Happening with Snooki & Joey" (US),
"Mission To Zyxx" (US), "The Russell Brand Podcast" (UK) and "Very
Bad Words" (US).
The platform receives over 60 million listens per month and
allows partners to share their content via Apple Podcasts,
BookMyShow, Deezer, Google Play, iHeartRadio, Saavn, Spotify,
Stitcher, Facebook and Twitter as well as their own websites and
mobile apps.
For more information on Audioboom visit audioboom.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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