Eyeing a burgeoning global ad spend on the digital audio media platforms, Brightcom Group will acquire a US-based digital audio firm, which owns and operates multiple assets, in a cash-stock deal worth $102.5 million.
“The assets acquisition value is pegged at $102.5 million, including $95 million in cash and $7.5 million of Brightcom Group stock,” a company spokesperson said.
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.
The Hyderabad-based IT and digital marketing solutions company has said it signed a Letter of Intent (LOI) to acquire all the assets of the US firm, which owns several radio stations, various digital brands and digital marketing services in the US.
“This move will mark the significant entry of the Brightcom Group into this fast-growing digital audio advertising segment,” Suresh Reddy, Chairman and Managing Director of Brightcom, said.
Digital audio advertising includes all ad revenue generated through pre and in-Stream Audio Ads that appear in music and podcast streaming services.
“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,” he said in a communication to the exchanges
“The deal is subject to customary financial, legal and business diligence, as well as regulatory approvals,” he said.
The advisors to the deal are Houlihan Lokey on the transaction side and Lerman Senter on the legal side. 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,” he said.
Global ad spending in the digital audio advertising segment will reach about $7 billion in 2022.
“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,” Peshwa Acharya, President (Group Strategy), Brightcom Group, said.
“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,” he said.
“As more users join the digital audio trend, the advertisers are keen on reaching these users,” he said. The Hindu BusinessLine