Brightcom Set To Aquire Assets of US-based Digital Audio Company For $102.5 M
Brightcom Group has signed a Letter of Intent (LOI) to acquire all the assets of a US-based digital audio firm that owns and operates multiple assets. The company is an integrated digital platform offering several programmed radio stations, various digital brands, and digital marketing services in many markets in the US.
In a statement, the company has revealed that the assets' acquisition value, including its net cash, is pegged at $102.5 million consisting of $95 million in cash and $7.5 million of BCG stock. The deal is subject to customary financial, legal, and business diligence, as well as regulatory approvals, thereafter. The advisors to the deal are Houlihan Lokey on the transaction side and Lerman Senter on the legal side.
It added that this acquisition is immediately EPS accretive by adding $45 million to the topline revenue of Brightcom and $15 million to its EBIDTA. The synergies between the current Brightcom business and new assets will add to the above numbers.
This move will mark the significant entry of the Brightcom Group into the fast-growing digital audio advertising segment. Digital audio advertising includes all ad revenue generated through pre and in-Stream Audio Ads that appear in music (music also contains various radio services) and podcast streaming services. This revenue would include ad-supported free versions of premium subscription services or services funded by advertising.
With already 200 million active consumers of digital audio in the US, audio is considered the second most popular digital activity. The worldwide user count is rapidly growing and is expected to go past 1.5 billion by 2026.
Formats can be single spots, tandem spots, or popular special advertising formats like presenting, On-Air Promotions, and Infomercials, directly embedded in the audio file or dynamically inserted. Global Ad spending in the digital audio advertising segment will reach about $7 billion in 2022.
The target company is a multi-platform digital audio company that owns and operates multiple assets, including digital audio, serving nearly 50% of millennials and GenZ users. The company is an integrated digital platform offering several programmed radio stations, various digital brands, and digital marketing services operating in many markets. In addition to being on the Google premier partners list and Microsoft Elite partners list, the target company also runs Ads from Facebook.
The acquired assets will become a part of the group's US operating entity under the new division of Brightcom Audio, headed by Satish Cheeti. "We are excited to bring these super successful audio assets into our fold, which will open up new opportunities and growth in line with the overall vision of the company," said Satish Cheeti, President of Brightcom Audio.
"This acquisition is in sync with our strategy to expand our services beyond display, mobile, and video to offer full-service end-to-end digital marketing assistance to our clients. With this acquisition, Brightcom Group will be one of the very few companies globally to provide a holistic and wide range of advertising solutions, including audio," said Peshwa Acharya, President (Group Strategy), Brightcom Group. "As more users join the digital audio trend, the advertisers are keen on reaching these users."
