Podcast audio-on-demand platform operator Audioboom announced its intention to acquire the entire issued share capital of Triton Digital Canada – the parent company of Triton Digital – for a cash consideration of $185m (£134m) on Tuesday, subject to adjustment for normalised working capital.
The AIM-traded firm described Triton as a “leading” technology provider to the online audio industry, headquartered in the US with offices in six locations.
In order to fund the proposed acquisition and to provide working capital for the company and its subsidiaries following it, Audioboom proposed to raise approximately £155m before expenses through a proposed placing of new ordinary shares.
The proposed acquisition would constitute a reverse takeover under rule 14 of the AIM Rules for Companies, Audioboom confirmed, and would 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,” the board of Audioboom cautioned in its statement.
In conjunction with admission of the enlarged share capital to trading on AIM, the company said it intends to perform a consolidation of its ordinary shares and change its name to Triton Digital Group.
“As the proposed acquisition would constitute a reverse takeover under the AIM Rules, then should the acquisition proceed the approval of shareholders of the company in a general meeting will be required,” the board explained.
“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, Audioboom's ordinary shares were suspended from trading with effect from 0730 GMT on Tuesday.
The company's ordinary shares would remain suspended until either an admission document was published, or an announcement released confirming that the proposed acquisition was not proceeding.
“The company will update shareholders as and when appropriate.”
Triton – launched in 2006 and providing services in more than 40 countries, was described by Audioboom's board as “one of the largest” technology and service providers to the online audio industry.
Its offering represented 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.
“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 $40.9m and audited US GAAP EBITDA of $9m, excluding non-recurring items.
The audited US GAAP net assets of Triton at that date were approximately $21.2m.
For the nine months ended 30 September last year, Triton recorded audited US GAAP turnover of approximately $29.8m and audited US GAAP EBITDA of approximately $10.5m, excluding non-recurring items.
As at the end of September, the audited US GAAP net assets of Triton were approximately $20.7m.
“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 president and chief executive officer and executive vice president and chief financial officer, respectively,” the Audioboom board said of the proposed board changes.
“It is proposed that Robert Proctor – current chief executive officer of the company – will remain as an executive director upon admission.”
Audioboom further proposed that a number of additional non-executive Directors, who had “significant experience” in the media and digital audio industries, would also join the company's board.
Looking at its own trading, Audioboom said that during the first two months of the first quarter since 1 December, its revenues and trading performance had been ahead of management's expectations.
It said the total available ad impressions for the first two months of the first quarter were 422 million, compared to 304 million in the full first quarter last year.
“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,” the board explained.
Total content channels were also up at 12,495, compared to 12,426 at the end of November last year.
“Given that the company derives the majority of its revenues in dollars yet currently reports its results in sterling, the recent strengthening of the pound against the dollar will potentially impact the results of the existing business versus sterling-based market expectations,” the board dud caution.
“The board proposes to move to reporting in dollars going forward.”