Audacy 220

Audacy has a $40 million digital acquisition in the works but the parent of Cadence13, Pineapple Street and Podcorn is not showing its hand just yet. The 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. 

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. 

Field told analysts in May that Audacy may not be done deal-making in the podcasting space either. “We have a strategic need to be in the podcast space,” he said, telling analysts that the money Audacy has spent on podcasting so far is just a fraction of what others have spent as they have 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 disclosure about the pending sale 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 down. The note offering is not contingent on closing the $40 million mystery acquisition, however. And the purchase is not contingent on closing the note offering either.

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 preleased a snippet of its third quarter earnings, in connection with the offering. In a regulatory filing, Audacy says its third quarter revenues rose 22% to 23% over the same period last year to between $327 million and $330 million. That is smaller than the 73% year-over-year revenue growth it reported for the second quarter.