Modern Media Acquisition Corp. (NASDAQ:MMDM) (“MMDM”) today
announced that it has entered into a definitive agreement to
combine with Akazoo Ltd, a global digital music streaming platform
based in the United Kingdom, in a transaction that would value the
combined company at approximately $469 million. Under the
definitive agreement, MMDM and Akazoo will combine under a new
holding company (referred to as “Holdco”), domiciled in Luxembourg,
which intends to list on the Nasdaq Stock Market under the symbol
“SONG” following completion of the transaction.
In its ninth year of operation, Akazoo is a leading music
streaming service specializing in emerging markets with 4.3 million
premium subscribers in 25 countries throughout Europe, South East
Asia, South America and Africa. MMDM is a special purpose
acquisition company formed for the purpose of effecting a merger,
acquisition or similar business combination sponsored by Modern
Media, LLC, an entity jointly owned by Lew Dickey, MMDM’s Chairman
and Chief Executive Officer, and an affiliate of Macquarie
Capital.
The combined company will continue to be led by Akazoo’s
experienced management team under the leadership of Apostolos N.
Zervos, Akazoo’s Founder and Chief Executive Officer. Lew Dickey
will serve as Chairman of the combined company.
Akazoo Investment Highlights
- Leading music streaming service with a
customer base of 4.3 million premium subscribers across 25
different countries with a focus on emerging markets
- Positioned to benefit from rapid-growth
of music streaming industry
- Music streaming now accounts for nearly
40% of global recorded music revenues, expected to account for 85%
of global music revenues by 2030
- Emerging markets are expected to be the
fastest growing music streaming markets over the next decade due to
the rapid rate of smartphone adoption, and to surpass developed
markets in total subscribers by 2024
- Successful hyper-local strategy for
content curation and cultural relevance with first mover
advantage
- Key partnerships with regional and
local telecom services and mobile messaging companies
- Patented Music AI technology for
real-time music recommendations, sonic analysis and automatic
playlisting, fully integrated into core platform
- Compelling financial profile, with
expected growth from further penetration of existing markets, and
expansion into new territories
- Multi-year track record of
profitability
- Experienced management team with deep
industry and market knowledge well-positioned to oversee organic
growth and expansion into new territories
- Active M&A pipeline
MMDM Chairman & CEO Lew Dickey commented, “We are excited to
enter into this transaction with Akazoo. It’s a terrific company
with strong management led by Founder & CEO, Apostolos Zervos.
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.”
Apostolos N. Zervos, Founder and CEO of Akazoo, remarked: “This
transaction marks the beginning of a new phase of growth for
Akazoo. Our goal has always been to provide our customers with the
most relevant and engaging user experience through deep knowledge
of local tastes and an expansive library of music content. We have
successfully executed on this mission since our inception in 2010
and have done so while obtaining profitability. We are now serving
over 4.3 million premium subscribers, and, as we look to our next
phase of growth, we could not be happier to partner with Lew and
MMDM. As our Chairman, Lew will bring extensive media industry,
public company and M&A experience to the Akazoo team. With a
public currency and an infusion of capital, Akazoo will be
positioned to expand more rapidly and efficiently than ever
before.”
David Dorfman, Head of Technology, Media & Telecom –
Americas, Europe & Asia of Macquarie Capital, 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.”
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.
Summary of Transaction
The transaction will combine Akazoo and MMDM under a new holding
company, Holdco that will become the publicly traded entity. After
giving effect to any redemptions by the public stockholders of MMDM
of their MMDM shares and the payment of transaction fees and
expenses, the balance of the approximately $212 million in cash
currently held in MMDM's trust account will be available to Holdco
to fund future growth. As a result of the transaction, each share
of MMDM common stock will convert into the right to receive one
share of Holdco and each warrant to purchase MMDM common stock will
convert into a warrant to purchase an equal number of shares of
Holdco on the same terms as the MMDM warrants. Also as a result of
the transaction, the holders of MMDM’s currently outstanding rights
to purchase MMDM common stock will receive, as to each right, 0.1
shares of Holdco. The existing Akazoo shareholders will receive an
aggregate number of Holdco shares equal to an assumed Akazoo
enterprise value of $380 million (less any cash payment to them)
divided by the per share redemption price applicable to the
redemptions by the public stockholders of MMDM. The existing Akazoo
shareholders will receive a cash distribution of up to $20 million,
in exchange for a portion of their shares, if and to the extent
that cash available in MMDM’s trust account, after the payment of
transaction fees and expenses and any redemptions, exceeds $110
million.
The transaction has been unanimously approved by the boards of
directors of both Akazoo and MMDM.
Completion of the transaction is subject to approval by
stockholders and certain other customary conditions. In addition,
pursuant to its certificate of incorporation, MMDM has until
February 17, 2019 to complete a business combination. On January 4,
2019, MMDM filed with the Securities and Exchange Commission (the
“SEC”) a definitive proxy statement with respect to a special
meeting in lieu of its 2018 annual meeting of stockholders to be
held on February 8, 2019, at which MMDM stockholders will be asked
to approve an amendment to the certificate of incorporation to
extend (the “Extension”) this date from February 17, 2019 to June
17, 2019. If this amendment is not approved, MMDM will have the
option to terminate the merger agreement, and will be required
under its certificate of incorporation to cease operations and
redeem all outstanding public shares of MMDM common stock.
Assuming all conditions are satisfied or waived, the transaction
is expected to close in the first half of 2019.
Additional information about the business combination has been
provided in an investor presentation being filed by MMDM with the
SEC, which will be available at the SEC website at www.sec.gov.
Macquarie Capital acted as lead financial advisor, and Jones Day
and Greenberg Traurig LLP served as legal counsel, to MMDM.
Loeb & Loeb LLP and Phanar Legal served as legal counsel to
Akazoo.
Conference Call Information
A recording of the merger announcement will be available
beginning at 7:30am Eastern Standard Time on January 24, 2019, by
clicking the following link:
MMDM-Akazoo Merger Announcement Recording
http://public.viavid.com/index.php?id=132988
About Akazoo
Founded in 2010, Akazoo is a UK-based, global, on-demand music
streaming subscription company with a focus on emerging markets.
Akazoo’s Premium service provides subscribers with unlimited online
and offline high-quality streaming access to a catalog of over 45
million songs on a commercial-free basis. Akazoo’s free,
ad-supported Radio service consists of over 100,000 stations and
exists as a separate application. With a presence in 25 countries
and growing, Akazoo’s platform includes 37 million registered users
and 4.3 million premium subscribers as of September 30, 2018.
Akazoo directly licenses music from thousands of labels and
provides both online and offline listening platforms, social media
integration, and a patented, AI-driven new music recommendation
engine. As consumers across the globe continue to shift their media
consumption to mobile devices, Akazoo is equipped with a
world-class mobile application and user experience which works
seamlessly across a multitude of mobile devices and provides a
high-quality user experience across a range of mobile networks from
2g to 4g LTE and soon 5g.
About MMDM
MMDM is a Delaware corporation formed for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization, recapitalization or other similar
business combination with one or more businesses. MMDM raised $210
million on its initial public offering and began trading on NASDAQ
in May 2017. Its common stock, rights and warrants trade under the
ticker symbols MMDM, MMDMR and MMDMW, respectively. Its units trade
under the ticker symbol MMDMU.
About Macquarie Capital
Macquarie Capital combines grounded thinking with innovative
approaches to develop transformative ideas and realize greater
possibilities for its clients – its partners. Macquarie looks
beyond convention to connect clients with ideas and opportunities
others don’t see, while its global platform, specialized expertise
and comprehensive services allow it to deliver what others
can’t.
Our capabilities encompass corporate advisory and a full
spectrum of capital solutions, including capital raising services
from equity, debt and private capital markets and principal
investments from Macquarie’s own balance sheet. These offerings are
reinforced through our deep sector expertise in aerospace, defense
and government services, consumer, gaming and leisure, financial
institutions, infrastructure and energy, real estate, resources,
services, telecommunications, media and technology across the US
with 402 transactions completed, valued at $264 billion, in the
year to March 31, 2018.
Additional Information and Where to Find it
For additional information on the proposed transaction, see
MMDM's Current Report on Form 8-K, which will be filed with the SEC
after this press release is distributed.
In connection with the proposed transaction, MMDM has filed a
definitive proxy statement relating to a special meeting of MMDM
stockholders, to be held on February 8, 2019, to approve the
Extension.
In connection with the proposed transaction, MMDM expects that
Holdco will file a Registration Statement on Form F-4, which will
include a preliminary proxy statement/prospectus for the
stockholders of MMDM. When complete, MMDM intends to mail the
definitive proxy statement/prospectus and other relevant documents
to its stockholders as of the record date established for voting on
the Business Combination.
Investors and security holders of MMDM are advised to read,
when available, each of the preliminary proxy statements, and
amendments thereto, and the definitive proxy statements and/or
prospectus in connection with MMDM's solicitation of proxies for
its (A) special meeting of stockholders to be held to approve the
Extension and (B) special meeting of stockholders to be held to
approve, among other things, the proposed transaction, because
those documents will contain important information about the
Extension, the proposed transaction and the parties
thereto.
The definitive proxy statement relating to the special meeting
of stockholders to be held to approve the Extension was mailed to
stockholders of MMDM as of January 14, 2019, which is the record
date established for voting at that special meeting. The definitive
proxy statement/prospectus relating to the special meeting of
stockholders to be held to approve the proposed transaction will be
mailed to stockholders of MMDM as of a record date to be
established for voting at that special meeting.
Stockholders will also be able to obtain copies of Holdco’s
Registration Statement, the proxy statement relating to the
Extension, the proxy statement/prospectus relating to the
transaction and the Form 8-K, without charge at the SEC's website
at www.sec.gov or by contacting MMDM at 3414 Peachtree Road, Suite
480, Atlanta, Georgia 30326, Attention: Corporate Secretary.
Participants in the Solicitation
MMDM, Akazoo Holdco and their respective directors, executive
officers, other members of management, and employees, under SEC
rules, may be deemed to be participants in the solicitation of
proxies from MMDM's stockholders in connection with the Extension
or the proposed transaction. Investors and security holders may
obtain more detailed information regarding the names and interests
in the Extension or the proposed transaction of MMDM's directors
and officers in MMDM's filings with the SEC, as well as MMDM’s
definitive proxy statement relating to the Extension and Holdco’s
Registration Statement on Form F-4, which will include the proxy
statement/prospectus of MMDM for the proposed transaction, when
available.
Forward Looking Statements
This release contains certain forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended, based on the
current expectations, estimates and projections of MMDM or Akazoo
Limited (the “Company”) about the Company’s operations, industry,
financial condition, performance, results of operations, and
liquidity. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts.
Statements containing words such as “may,” “could,” “believe,”
“anticipate,” “expect,” “intend,” “plan,” “project,” “projections,”
“business outlook,” “estimate,” or similar expressions constitute
forward-looking statements. Forward-looking statements represent
management’s current expectations or predictions of future
conditions, events or results. These forward-looking statements
include, but are not limited to, statements about, or are based
upon assumptions regarding, the Company’s strategies and future
financial performance; expectations or estimates about future
business plans or objectives, prospective performance and
opportunities and competitors, including revenues; customer
acquisition and retention; operating expenses; market trends,
including those in the markets in which the Company competes;
liquidity; cash flows and uses of cash; capital expenditures; the
Company’s ability to invest in growth initiatives and pursue
acquisition opportunities; the Company’s products and services;
pricing; marketing plans; the anticipated benefits of the proposed
business combination; the amount of any redemptions by existing
holders of MMDM shares; the sources and uses of cash; the
management and board composition of the combined company following
the proposed business combination; the anticipated capitalization
and enterprise value of the combined company; the continued listing
of the combined company’s securities on Nasdaq; whether MMDM is
able to successfully secure stockholder approval of the Extension;
and the structure, terms and timing of the proposed business
combination. You are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's good faith
beliefs, assumptions and expectations only as of the date hereof.
Any such forward-looking statements are not guarantees of future
performance or results and involve risks and uncertainties that may
cause actual performance and results to differ materially from
those predicted, many of which are beyond the Company’s control.
Reported results should not be considered an indication of future
performance. Except as required by law, we undertake no obligation
to publicly release the results of any revision or update to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
No Offer or Solicitation
This announcement is for informational purposes only and is
neither an offer to purchase, nor a solicitation of an offer to
sell, subscribe for or buy any securities or the solicitation of
any vote in any jurisdiction pursuant to the proposed transactions
or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190124005588/en/
Media:Lewis W. Dickey, Jr.President and Chief Executive
OfficerModern Media Acquisition Corp.ldickey@modernmediaco.com
Modern Media Acquisition (NASDAQ:MMDM)
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