25th Aug 2020 11:53
(Alliance News) - Virtual reality content firm MelodyVR Group PLC on Tuesday said it has agreed to acquire music streaming service Napster in a USD70 million deal.
Under the terms of the deal, a MelodyVR subsidiary will be merged into Rhapsody International Inc, which trades as Napster.
The deal is classed as a reverse takeover so MelodyVR shares have been suspended. The stock closed at 4.41 pence each in London on Monday.
MelodyVR said it will pay USD26.3 million to the sellers, including USD15.0 million in cash and the issue of 200 million MelodyVR shares.
RealNetworks Inc - the majority owner of Napster with its 84% stake - said the total value of the deal is roughly USD70 million, as MelodyVR has USD44 million in payment obligations to "various music industry entities".
"The company, which operates the MelodyVR platform, believes that the addition of Napster's music library, comprising in excess of 80 million music tracks, to its own platform of VR music performances and live streamed events will provide a compelling and differentiated offering to music fans around the world," MelodyVR said.
"Napster combines the iconic history of one of the most recognisable music brands in the world with the vast experience and technological platform of the industry's first subscription streaming service provider."
Also on Tuesday, MelodyVR unveiled plans for a USD15.4 million fundraise. The company will issue 335.6 million shares at 3.5p each in a placing and subscription.
The fundraise will go towards a USD12.0 million deposit as part of the Napster deal.
By Eric Cunha; [email protected]
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