UBC Media confirmed today the signing of a heads of term for the acquisition of 7digital, which would result in a reverse takeover if consummated.
In doing so, the agreement would create a combined company offering the digital music delivery and audio content production services both provided separately. In addition, 7digital receives a listing on the stock exchange.
7digital specializes in digital music services, supplying a sizable music library. Its clients include Samsung, for which it provides streaming services; HMV, a British retailer for which it supplies digital music stores; and Blackberry, for which 7digital powers music download stores -- among others.
Meanwhile, UBC supplies multiple services to radio, including the BBC.
"Both UBC and 7digital believe that the growth of digital music services is increasingly linked to the growth of listening to radio online and on mobile, creating a need for hybrid services which incorporate both radio listening, curated playlists and on demand music," UBC said in a release on its website.
"Our aim is to create a new public company via 7digital which will be perfectly placed to exploit the rapidly developing market for online and mobile music services," Simon Cole, chief executive of UBC, said in a statement. "The evidence is that the growth in this market will be in curated services which consolidate music and radio in one place and our new company will be perfectly placed here."
UBC noted that the heads of terms' exclusivity period runs through April 4 and that the acquisition will be official upon the publishing of an admission document by the end of May.
The company has also announced it's entered into non-binding heads of terms with One Delta in order to buy the share capital of Audioboo, an audio capture and sharing social network.