Songtradr CEO Paul Wiltshire. Photo Credit: Songtradr
Licensing and distribution platform Songtradr has officially announced a deal to acquire London-headquartered music services provider 7digital.
Songtradr’s latest purchase, which follows the 2022 buyout of music-classification platform Musicube, came to light in acquisition documents that were forwarded to Digital Music News this morning. When the market closed yesterday, 7digital stock (LON: 7DIG) was worth 0.325 pence per share.
But nine-year-old Songtradr has agreed to pay 0.695 pence for each of 19-year-old 7digital’s 2.79 billion outstanding shares, for a total purchase price of about £19.4 million (currently $23.4 million), according to the aforesaid documents.
Predictably, the selling company’s directors (who hold a cumulative 1.19 billion shares) intend to “recommend unanimously” that 7digital investors vote to confirm the transaction at two forthcoming meetings. Songtradr is also said to have secured “irrevocable undertakings” from a number of key investors (who possess 675,222,222 7digital shares) to vote in favor of the deal.
Consequently, the involved parties expect the transaction to wrap sometime during the remainder of 2023’s first quarter. Songtradr is further set to pay down 7digital’s £2 million revolving credit facility as well as a pair of £500,000 loans once the deal formally closes.
On the personnel front, Songtradr intends to keep 7digital’s staff on board post-buyout, per the companies’ summary of the pact; a couple execs will depart, however, and 7digital employs 46 individuals at present. Additionally, the purchasing party may “consider providing retention incentives for a small number of senior employees,” though higher-ups have yet to determine the incentives’ specifics.
And while 7digital’s London offices will remain open for the time being, the Big Sync Music owner Songtradr indicated that it may ultimately close the building and establish a central division for both the affected team members and its existing UK employees.
Finally, in terms of the organization of the post-acquisition operation, 7digital CEO Paul Langworthy is poised to join Songtradr’s executive team, whereas interim chairman Mark Foster, CFO Michael Juskiewicz, and all non-executive directors will step down.
Addressing the 7digital purchase agreement in a statement, Songtradr CEO Paul Wiltshire said: “Having closely followed 7digital’s evolution for a long time, we are delighted to have reached agreement to combine our businesses, expanding our position in the B2B music licensing and technology ecosystem. We are very excited with respect to what our collective team will be able to achieve in delivering an enhanced offering for our clients and to help shape the future of music licensing.”
In remarks of his own, 7digital head Paul Langworthy communicated in part: “Songtradr’s ambition for the business matches our own and there is strong strategic alignment on how best to drive growth for the Combined Group, as well as how best to serve the needs of a growing B2B market.
“The Offer recognises the underlying value of the Company, providing all 7digital Shareholders with the opportunity of a certain cash exit at an attractive premium to the prevailing market share price. We firmly believe that as part of the Combined Group, 7digital will have access to the capital, support and scale it needs to achieve its full potential,” continued the former Universal Music Group higher-up Langworthy, whose company partnered with Pinterest last year.