All Active Asset Capital, a U.K.-based private equity firm that has been angling to buy the podcast company Audioboom since July, is walking away from a potential deal. The move comes after Audioboom gave it until Monday, Sept. 13 to make a firm offer. The two companies had met last month and All Active had said it expected to hand Audioboom a proposal by last Friday, Sept. 10. But that date came and went without All Active doing so.
All Active said it was “surprised and disappointed” with Audioboom’s “negative response” to a request to push back the deadline for coming up with a formal buyout proposal after it told investors that a number of concerns remained – including the deal included payment in the form of shares in All Active, which was delisted from a London exchange in July. In a letter to investors, All Active acknowledged it has not yet satisfied the preconditions put on any deal to buy Audioboom. But it apparently already had the backing of Audioboom shareholders representing 51% of its voting shares.
“The board of Audioboom has ignored the wishes of shareholders holding a majority of its shares to give All Active Asset Capital the opportunity to fully explain its offer to shareholders,” it said the filing. “In order to prevent a false market in Audioboom shares, the board of AAA has therefore decided to withdraw its possible offer.”
All Active earlier made a tentative $16.70 (£12) per share bid, which would value the go-private deal at $262 million. The offer, All Active said, represents a 35.6% premium over Audioboom’s stock price on July 16.
While this round of negotiations may be over, All Active is signaling it still believes a deal could be had. “AAA continues to admire Audioboom as a company and believes that transformational value can still be created for Audioboom shareholders through operational developments and new business collaboration,” it said. “Therefore, AAA reserves its right to bid for Audioboom again and will consider a bid in the future.” But the firm said that is unlikely to occur until it completes a pending acquisition and relists on an international stock exchange, potentially in New York.
It is the second time in the past year that Audioboom has looked at a potential sale. In 2020 it conducted an eight-month strategic review but the board ultimately decided not to sell after receiving bids that it felt undervalued the company.
Investors took the news in stride. While Audioboom’s stock price dropped 12% on Monday when it appeared the deadline had been missed, it closed up 10% in trading in London today (Sept. 14).
For its part, Audioboom is sending a life-goes-on message to investors. The company said August revenue totaled $7 million, a 187% increase compared to the $2.4 million it had on the books a year ago. The list of advertisers last month included a record 371 brand advertisers – up from 255 last August. And its average revenue per 1,000 downloads, what it calls its eCPM, increased to a record $63.83, up 120% from $29.04 last year.
Audioboom also announced that it now expects to generate revenue “significantly in excess” of what it previously forecast for 2021. It credits a “strong sales momentum” as well as a number of new connect partnerships and release of several Audioboom Originals series. Audioboom has also increased the sales of its back catalog inventory with the creation of a its proprietary AdRip tool.
“Audioboom’s excellent performance has continued through 2021 as we execute our content-focused expansion plan,” said CEO Stuart Last in the statement. “I am pleased that we continue to generate strong demand for our premium sales network, while our new ad tech tool AdRip is now delivering material value to the vast back catalogue of content on our platform. We are focused on ensuring 2021 continues to deliver even more success.”