15th May 2018 12:31
LONDON (Alliance News) - Podcasting platform Audioboom Group PLC said Tuesday it will no longer proceed with the USD185 million acquisition of Triton Digital Canada Inc and will pay a break fee after it failed to complete the share placing set to fund the deal.
Its shares remain suspended as it seek capital to fund working capital requirements.
In February, Audioboom agreed to buy audio technology services firm Triton Digital Canada - parent of Triton Digital Inc - in a USD185 million all-cash deal. Audioboom's shares were suspended from trading at the time as the transaction would have constituted a reverse takeover under AIM rules. Audioboom itself had a market capitalisation of just GBP35.3 million at the time.
Audioboom had planned to fund the deal through the placing of shares worth approximately GBP155 million. On completion of the placing, Audioboom intended to consolidate its shares and rename the firm Triton Digital Group PLC.
On Tuesday, however, Audioboom will "not be proceeding" with the acquisition. This was after - despite "significant demand" - it was unable to complete the placing to fund the deal.
As a result of the withdrawal from the deal, Audioboom is due to pay Triton GBP700,000 as a break fee. Of this, GBP90,000 will be paid in cash and the remainder through the issue of 16.6 million shares.
The failure of the acquisition and placing means Audioboom now "requires further financing in the short-term for investment in additional podcasting content and working capital purposes." In April it issued GBP1.0 million in convertible loans notes for this purpose.
"However," Audioboom explained, "given the commercial opportunities that the company has been working on in recent months, and the additional requirement for working capital, further equity funding will be required as soon as possible."
The convertible loan funds, Audioboom added, will fund working capital requirements for "up to" four weeks from Tuesday. Consequently, Audioboom requested its share remain suspended from trading on AIM in Lonond, as its "financial position remains uncertain pending the successful completion of the further equity funding."
Should an equity raise or alternative funding be unavailable, it may results in the winding up of the firm. Audioboom remains, however, "confident" it will be able to secure further funding.
Related Shares:
Audioboom Grp.