Audioboom, which has flirted with a potential sale for more than a year, is the target of a takeover bid by All Active Asset Capital, a U.K.-based private equity firm. All Active has made a tentative $16.70 (£12) per share bid, which would value the go-private deal at $262 million. Audioboom is traded in London and under U.K. securities laws All Active now has until Aug. 16 to make a firm offer for Audioboom.
The offer – which All Active says represents a 35.6% premium over Audioboom’s stock price on July 16, appears open for additional negotiations. All Active said it “remains fully committed to continuing conversations and engaging further with Audioboom.” The firm says more than a quarter of Audioboom’s equity holders have already given their “irrevocable support” to the offer, which would be funding with a mix of cash and shares in All Active. It did not say how much would be in in cash, but All Active recently raised $20 million and has commitments to raise another $188 million.
The proposal so far has the backing of Nick Candy, the billionaire property developer, whose Candy Ventures is Audioboom’s largest shareholder. It holds a roughly 14.48% stake. The Dutch investment firm Aaqua B.V., which holds a 12.43% stake also supports the proposed takeover. Aaqua B.V. already has close ties with All Active.
But Audioboom’s independent board members have told shareholders that, in their view, the deal “significantly undervalues” the business and they do not see any “compelling logic to justify a combination of the two businesses,” adding, “At present, shareholders are advised to take no action.” The board also said it does not believe the offer structure proposed by All Active is “attractive” saying it would mean swapping shares traded on the London Stock Exchange or shares of All Access that are in limbo.
All Active’s stock was delisted today (July 30) and it has conceded that it is a potential hurdle for any deal-making. While All Active says it is working on securing a re-listing of its shares on an international exchange – potentially in the U.S. – it acknowledged concerns about that have already been raised by Audioboom.
The offer is part of All Active’s larger effort to reform its investment portfolio over to technology-focused companies. In its announcement, All Active said it believes its combination with Audioboom “would create a compelling portfolio of innovative, high growth technology investments that could create significant new accretive value for the shareholders of both companies in the future.”
The potential of a sale reemerged in April when CEO Stuart Last said they would be open to suitors. “If a big business is looking to be in the space, and they are looking to acquire a company that is already scaled and has the potential to scale further, then Audioboom is in a prime position to take advantage of that,” Last told Bloomberg.
Audioboom considered several potential offers last year as part of an eight-month strategic review, but ultimately decided not to sell when its owners felt they undervalued the company. “There has been limited interest in paying the level of premium to the prevailing share price that the board considers would represent appropriate value for shareholders,” it announced last October.
Audioboom reported last week that its revenue during the first six months of 2021 nearly doubled compared to a year ago as it not only set a record during the second quarter compared to a year ago – when the pandemic’s impact was the most significant – but the entire first half. It also saw the number of advertisers on its roster top three hundred.
During the second quarter Audioboom revenue soared 144% compared to a year ago to $13.3 million. That was also a 39% quarter-to-quarter gain from the first quarter. That brought first half revenue to $22.8 million, a 93% increase versus a year ago. The company also swung to a profit. It made $200,000 during the first half compared to a $1.2 million loss during the first half of 2020.