For months, the radio industry has waited with bated breath for an announcement that involved Lew Dickey Jr., co-founder of Cumulus Media. Would he be returning to the business?
His publicly traded Modern Media Acquisition Corp. had money to spend, and there was chatter that Dickey could wind up owning Cumulus once again.
On Thursday evening, British Standard Time, Dickey formally revealed what he’s up to.
It has nothing to do with the radio business … but could become a competitor, of sorts.
What does Great Britain have to do with Dickey’s announcement?
Everything. His Modern Media Acquisition Corp. has entered into a definitive agreement to combine with Akazoo Ltd.
What the heck is that? Akazoo describes itself as “a global digital music streaming platform based in the United Kingdom.”
Get to know Akazoo: The transaction would value the combined company at approximately $469 million.
The transaction will see MMDM and Akazoo combine under a new Luxembourg-based holding company that intends to list on the Nasdaq exchange under the apropos ticker symbol “SONG” following completion of the transaction.
Never heard of Akazoo?
It’s actually been in operation for nine years, and is a “leading music streaming service” specializing in emerging markets. Akazoo says it has some 4.3 million premium subscribers across 25 countries, located in Europe, Southeast Asia, South America and Africa. In total, Akazoo claims to have 37 million registered users as of September 30, 2018.
Dickey will serve as Chairman of the post-merger entity; Akazoo will continue to see the leadership of founder and CEO Apostolos Zervos.
MMDM, which trades on Nasdaq as “MMDMU” and is presently valued at $10.52 a share, is a special purpose acquisition company formed for the purpose of effecting a merger, acquisition or similar business combination for Modern Media LLC, an affiliate of Macquarie Capital.
Akazoo’s existing shareholders, which include Toscafund/Penta Capital, are expected to own a majority of the stock of the combined company upon the consummation of the proposed transaction.
Akazoo uses patented music AI technology allowing for real-time music recommendations, sonic analysis and automatic playlisting, which is fully integrated into Akazoo’s core platform.
Similar to Spotify and iHeartRadio, Akazoo also offers a free, ad-supported radio service comprised of more than 100,000 stations, and exists as a separate application.
Akazoo directly licenses music and provides both online and offline listening platforms.
“We are excited to enter into this transaction with Akazoo,” Dickey said. “It’s a terrific company with strong management. As one of the pioneering companies in the space, they have spent the last decade building a profitable business model with a strong competitive moat in emerging markets. Music streaming is one of the best secular growth stories in global media and entertainment, and Akazoo is a top global platform that we expect will benefit tremendously from an infusion of growth equity and a public currency to participate in further industry consolidation.”
David Dorfman, Macquarie’s Head of Technology, Media & Telecom – Americas, Europe & Asia, said, “The announced transaction between Akazoo and MMDM is an exciting opportunity for shareholders and customers. Akazoo is a fast-growing and profitable business that is poised to benefit from the continued adoption of music streaming across mobile devices. We believe the proposed transaction will enable the company to continue to build on its presence in 25 countries and growing.”
Jones Day and Greenberg Traurig LLP served as legal counsel to MMDM. Loeb & Loeb LLP and Phanar Legal served as legal counsel to Akazoo.
Pursuant to its certificate of incorporation, MMDM has until February 17 to complete a business combination. The transaction is expected to close in the first half of 2019.