The E.W. Scripps Co., which sold its podcast company Stitcher in October and nearly doubled its return on that investment, was an early entrant into podcasting and digital audio.
Now, it is selling Triton Digital, a divestiture the broadcast TV company says “reflects Scripps’ consistent invest-for-growth strategy that capitalizes on emerging media marketplaces to unlock shareholder value.
The buyer is iHeartMedia, and the price tag is a cool $230 million.
For Scripps, the deal represents a cash-on-cash return of 1.6x for a business Scripps acquired in late 2018.
Triton is a global technology and services leader for the digital audio and podcast industry. Scripps bought the company for $150 million, and it has been accretive to segment margins since then, it says.
Operating in more than 50 countries, Triton Digital is a global advertising technology SaaS platform for audio streaming, podcasting and metrics that, Scripps says, “enables publishers to monetize their audiences by providing digital audio measurement and advanced audio-focused infrastructure to maximize the yield of audio inventory.”
The company’s two lines of business focus on advertising infrastructure and measurement, including a content delivery system that distributes digital audio streams and podcasts to listeners while dynamically inserting ads and measurement business that tracks audience and creates ratings reports.
In addition to measuring audiences for customers, Triton Digital operates a programmatic marketplace for digital audio programmatic ad-buying and Yield-Op, a Supply Side Platform (SSP) that specializes in audio and enables programmatic audio advertising.
“We are thrilled to join the iHeartMedia family,” said Triton Digital CEO Neal Schore. “We remain deeply committed to providing the world’s broadcasters, podcasters, and online audio publishers with continuously innovated, best-in-class solutions and services for online audio management, advertising, and consumption data, and are well positioned to enhance iHeartMedia’s value proposition to audiences and advertisers.”
A CHAPTER CLOSES FOR SCRIPPS, AND IS WRITTEN FOR iHEART
“The sale of Triton creates significant value for Scripps’ shareholders and employees, as we close a chapter on our growth of digital audio businesses through a series of successful transactions and a focus on prudent operations, including our core TV business,” said Scripps President/CEO Adam Symson. “We believe iHeartMedia is a perfect fit for Triton Digital given their focus and position as the leader in audio solutions.”
For iHeartMedia, “Adding Triton Digital and its industry leading services to the iHeartMedia audio ecosystem establishes iHeartMedia as the only company with a total audio advertising technology and data solution,” said Bob Pittman, the company’s Chairman/CEO. “iHeart, with our strong leadership position in podcasting, digital radio and broadcast, already provides cutting edge audio management, programmatic and data solutions for the broadcast radio, digital audio and podcasting industries, and this acquisition further strengthens our position as the No. 1 audio company in America and provides unique — and critical — solutions for the industry and for advertisers.”
The company adds that with this acquisition, a significant investment in the podcasting business, iHeartMedia “will now be able to provide audio content to producers and advertisers with an industry-leading full ad service package for streaming and podcasting no matter their size, reach or distribution method.”
In particular, iHeartMedia claims it is now “the first and only company in the audio market to provide four distribution methods for audio, including on-demand, broadcast and digital streaming radio and podcasting, and to service all audio assets programmatically.”
Scripps Chief Financial Officer Jason Combs said the company would use proceeds from the Triton sale to pay down debt.
“We remain focused on bringing our debt back down to our company’s historical levels as quickly as possible while at the same time we reap the financial benefits of being a new leader in national television as we have been in local broadcast,” Combs said.
For iHeart, the Triton purchase follows post-bankruptcy emergence investments in the audio technology space for iHeartMedia. In October 2020, the company once known as Clear Channel Communications acquired Voxnest, a marketplace for podcasts and provider of podcast analytics, enterprise publishing tools, programmatic integration and targeted ad serving. This followed the purchases of Jelli Inc, purveyors of technology that offers marketers a digital-compatible buying platform for broadcast radio that includes programmatic buying, data targeting and creative optimization; Radiojar, which developed a cloud-based audio playout platform through iHeartMedia-owned RCS; and Unified, a social advertising data intelligence platform and solutions provider.
- Sale price of $230 million, representing an internal rate of return after taxes in the mid-20% range and a low teens EBITDA multiple
- Proceeds from the sale used primarily to pay down Scripps debt
- Tax liability effective rate of 5%
- The move of all Triton employees to iHeart
The Triton transaction is expected to close in the first quarter, pending Hart-Scott-Rodino clearance.