On Feb. 13, one of the world’s top spoken word audio on-demand platforms made a major play for one of the globe’s biggest streaming audio providers.
In a headline-grabbing story attracting attention in both North America and the U.K., Audioboom offered to purchase Triton Digital for $185 million in an all-cash deal.
Three months later, the transaction has been cancelled.
In an announcement distributed Tuesday (5/15), London-based Audioboom revealed that its proposed acquisition of Canadian operation Triton will not be proceeding.
To fund the deal and to provide working capital for Triton, Audioboom planned to raise approximately £155 million, before expenses, through a proposed placing of new ordinary shares. It explained that “in spite of significant demand, it has not been possible to complete the placing.”
This would have provided for, technically, a reverse takeover, with Audioboom and Triton combining to form Triton Digital Group plc.
Audioboom share trading was suspended on Feb. 13. It will remain suspended as the company seeks further short-term financing “for investment in additional podcasting content and working capital.”
This signals that Audioboom’s finances are shaky — and this is likely the reason why the Triton deal was canceled.
On April 27, Audioboom issued convertible loan notes valued at £1 million. That’s not enough, it said Tuesday, and needs more cash.
“The proceeds from the convertible loan notes will only provide the company with sufficient working capital for a further period of up to four weeks from today’s date, although the company would take appropriate cash management measures to seek to extend such period if required,” Audioboom said.
For Triton, it’s getting a “Break Free” fee from Audioboom, regardless of that company’s financial strain.
The Break Fee is £700,000 ($945,910 USD as of May 15) and is required to paid to Triton by June 13. This requires £90,000 ($121,617 USD) in cash and 16.6 million ordinary shares of Audioboom deemed fully paid up be presented to Triton.
With the dissolution of the Triton deal, Audioboom CEO Rob Proctor remains in his role.
Audioboom hosts more than 12,000 content channels, with key U.S. content partners including Cumulus Media and its national programming unit Westwood One, and Associated Press.
While Triton is largely known across the radio industry for its streaming audio solutions, this was a podcast play—and a large one that would have positioned Audioboom as a dominant entity in the burgeoning play-when-you-want audio entertainment arena. Triton’s software as a service (SaaS)-based offerings focus on digital audience measurement; streaming platform and services; and audience engagement.
Triton is a Canadian technology company with a large Montréal presence, it is headquartered in the U.S. and operates from six locations—including its main space inside Sherman Oaks Galleria.
Commenting on the transaction’s nix, Proctor said, “While the board is naturally disappointed that we were unable to raise the necessary funds to complete the proposed acquisition, I am pleased to report that our efforts to consolidate our customer base and attract more commercially viable podcasts are progressing well, with a growing proportion of our overall inventory being focused on the lucrative ‘in-read’ advertising space.
“The further reduction in the number of smaller, unsustainable podcasts on our
platform will allow us to further reduce our monthly operating costs,” he continued. “Overall Audioboom continues to run a tighter, more compact operation, which will ultimately lead to a stronger more vibrant business.”