UBC Media Acquires 7digital in Reverse Takeover Deal

UBC Media has conditionally agreed to buy British digital music company 7digital in a £16.5 million ($28 million) reverse takeover deal that will see the two companies merge to form a new entity called 7digital Group PLC. 

The new, enlarged company will be listed on the stock market June 10 with an estimated valuation in the region of £29 million ($49 million), according to UBC’s proposed acquisition. 

Under the terms of the deal, the existing shareholders of London-based 7digital -- which provides digital music services for a range of global brands, including Samsung, BlackBerry, HMV (U.K. and Canada), Sky Communications and HTC  -- will control 75% of the new company.

On completion, 7digital co-founder and CEO Ben Drury will take up the position of chief strategy officer while UBC chief executive Simon Cole will be installed as 7digital Group CEO. Former London Stock Exchange chair Donald Cruickshank will become chairman of the combined business, whose revenue model is based on “expected strong growth from [its] B2B service offerings.”

“This transaction will create a world leading digital music and radio platform that is ideally positioned to exploit the convergence of radio and digital music services,” said Cole in a statement. “The new business will also be well-placed to drive consolidation of the fragmented B2B digital music industry,” he added.
 
Commenting on the merger, which was first proposed November last year, Drury cited the U.S. launch of iTunes radio and the expected acquisition of Beats by Apple as evidence of the growing union between radio and streaming services. 

“Digital music has come a long way since the invention of MP3 in the nineties, but it is only now that the majority of consumers are beginning to embrace music streaming and download services. The 7digital open platform simplifies access to the world’s music and the combination with UBC will help further enhance the platform to include radio-style capability and services to help unlock the mass market for our customers and partners,” Drury went on to say.
 
UBC Media was established in June 2000 and provides radio and video content to the BBC and Yahoo! Europe as well as over 150 commercial radio companies, producing approximately 1,200 hours of video and audio content each year.
 
London-based 7digtal was co-founded by Ben Drury and James Kane in 2003 initially building download stores for record labels, brands and retailers. It has since expanded to have licences in 42 countries in North America, Latin America, Europe, Asia-Pacific and Africa and a catalogue of more than 26 million tracks via download and streaming services.


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