Audacy has a $40 million digital acquisition in the works but it’s not showing its hand just yet. Radio’s second largest company says it is “in the process of completing a small digital acquisition for approximately $40 million” that it expects to close this month. Audacy is funding the purchase by drawing on its revolving credit facility.
The disclosure was made in a press release announcing a $45 million note offering of 6.5% senior secured second-lien notes that come due in 2027. Audacy says it will use the proceeds from the offering to pay down a portion of its term loan to offset the impact of the revolver draw. The note offering isn’t contingent on closing the $40 million mystery acquisition. And the purchase isn't contingent on closing the note offering.
Audacy struck a $22.5 million deal earlier this year to buy Podcorn, which operates a marketplace that connects advertisers with podcasters to create native advertising and branded content. Audacy earlier struck two deals spending $48 million to buy podcast creators Cadence13 and Pineapple Street Studios in 2019.
CEO David Field told analysts in May that Audacy may not be done deal-making in the podcasting space. “We have a strategic need to be in the podcast space,” he said, telling analysts that the money the company has spent on podcasting so far is just a fraction of what others have invested as Audacy has taken a more “strategic” and “disciplined” approach. “We will be very selective, but we will keep our eyes open if we see anything that is really value-creating for our shareholders and is smart for us,” said Field.
The new note offering is actually an add-on to one Audacy made in April 2019 where it issued $425 million of the same 6.5% notes due in 2027. The additional notes have the same terms as the ones offered in 2019 and are being sold to institutional buyers in a private offering.
Meanwhile, Audacy has pre-released a snippet of its third quarter earnings, in connection with the offering. In a regulatory filing Audacy says its Q3 2021 revenues rose 22% to 23% over the same period last year to between $327 million and $330 million.