PodcastOne, the podcast network created in 2013 by longtime network radio executive Norm Pattiz, has been acquired by LiveXLive Media, the live concert video streaming service, in an all-stock deal valued at $18.1 million. Pattiz will join LiveXLive as a significant shareholder and remain Executive Chairman of PodcastOne.
PodcastOne had more than 2.1 billion downloads in 2019 and has a library of more than 300 podcasts, including shows from Adam Carolla, A&E's Cold Case Files, Steve Austin, Shaquille O'Neal, Tip "T.I." Harris, and Dr. Drew Pinsky. PodcastOne had $27.5 million in revenue in last year.
"All of us at PodcastOne are excited about joining the LiveXLive team and taking advantage of obvious future synergies between our businesses," Pattiz said in a statement. "PodcastOne's well-established podcasting business is an excellent complement to LiveXLive's 'live social music network', delivering premium livestreams, digital audio and on-demand music."
Both companies are headquartered in Los Angeles and a consolidation of teams is anticipated to generate cost savings and combine back-end support and office locations. PodcastOne will bring an experienced advertising sales team to the table, effectively tripling the size of the current LiveXLive sales force. PodcastOne also has a roster of major national brand advertisers. LiveXLive plans to integrate PodcastOne into its music platform, offering current and new subscribers more unique and original programming.
The deal comes as LiveXLive’s concert video streams remain darkened by the coronavirus shutdowns. Adding hundreds of podcasts to its offering will help further diversify its business portfolio, which already includes the streaming radio service Slacker. LiveXLive has been testing the waters of podcasting. Last May it began integrating podcasts into its platform for the first time when it put a “podcasts” tab on its app alongside tabs for live events or music stations.
"We're excited to expand our business into the fast-growing podcast category, complementing our music platform of streaming audio, on-demand video and live event performances. The acquisition will add to and diversify our revenue with a strong advertising component,” said LiveXLive CEO Robert Ellin.
“Once acquired and integrated, we will have a significant opportunity to cross-sell and cross-promote to our respective subscribers, advertisers, and sponsors as well as provide our collective artists and on-air talent with an expanded platform to increase their social media and online presence,” he added.
Under the structure of the deal, LiveXLive will acquire 100% of the equity interests of Courtside Group and issue to stockholders of PodcastOne approximately 5.45 million shares of LiveXLive's common stock. The transaction is valued at $18.1 million based on LiveXLive's closing stock price on May 7. Those shareholders will be restricted from selling their LiveXLive shares for one year. Both company’s boards have already given their approval to the transaction, which is expected to close by the end of June.
A stock-based deal may be unexpected in the current market. But unlike many companies, shares of LiveXLive have become more valuable since the stay-at-home lockdowns went into place in March as the prospect of seeing a concert in-person became less appealing to many. After closing at a low of $1.08 on March 8, LiveXLive’s share price has tripled. It closed at $3.32 on Thursday. News of the PodcastOne acquisition helped to further boost its value with the stock up 5% in pre-market trading.
Among the investors in PodcastOne has been Hubbard Radio, which took a 30% stake in the podcast company in 2015.
"I look forward to adding Norman to our management team,” Ellin said of Pattiz. “His entrepreneurial brilliance, as well as his incredible drive as a business executive, will be a valuable asset to LiveXLive.”