Completion of Acquisition of Snowite SAS

7digital Group plc

("7digital", "the Group" or "the Company")

Completion of Acquisition of Snowite SAS

7digital is pleased to announce that it has completed the Acquisition of the leading French digital streaming music provider Snowite SAS (the "Acquisition", and "Snowite"), originally announced on 6 January 2016.

The Company has negotiated with the French Commercial Courts a slight reduction in the amount of existing debt of Snowite to be repaid by the Company, from €1.8m to €1.7m, as part of its "Procédure de Sauvegarde" under French insolvency law (a procedure similar to "Chapter 11" proceedings in the United States) and fixed the term of repayment to 8 years (following a 1 year moratorium), payable in equal instalments with no interest.

Headlines

· Acquisition expected to increase 7digital's turnover by at least £1.2m on an annualised basis

· Snowite has contracted annualised monthly recurring revenues of approximately £864,000

· Acquisition brings with it major French retail clients and strong sales pipeline in French-speaking markets

· Accelerates 7digital's profitability and will be earnings enhancing after an integration period

· Overhead synergies of more than £500,000 per annum anticipated from 2017

· As part of the Acquisition, the Snowite brand will be incorporated into 7digital and all new activity will be under the 7digital brand

· Consideration on Completion of 7,320,000 Consideration Shares

· 7digital to repay the outstanding Snowite debt of €1.7m (£1.3m) over 8 years (following a 1 year moratorium) under the "Procédure de Sauvegarde" provisions

The consideration for the Acquisition will be satisfied by the issue of 7,320,000 new Ordinary Shares of the Company ("Consideration Shares") to the vendors of Snowite (the "Vendors"). Based on the closing mid-market share price of an Ordinary Share on the day prior to this announcement, the Consideration Shares have a value of £649,650. The 7,320,000 Consideration Shares will, when issued, represent c.6.34 per cent. of the enlarged issued share capital of the Company.

Application has been made for the Consideration Shares to be admitted to trading on AIM and it is expected that admission will take place on 14 April 2016. The Consideration Shares will rank pari passu with the existing shares of the Company. Following this allotment, the total issued share capital of the Company will increase to 115,751,517 ordinary shares.

The Company holds 54,944 Ordinary Shares in Treasury, which do not carry any voting rights. Therefore, the total number of Ordinary Shares carrying voting rights in 7digital is 115,696,573.

The figure of 115,696,573 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest, or change to their interest, in the Company under the Disclosure and Transparency Rules.

The Company has also agreed a further 5 year put-and-call arrangement over 67.5% of the consideration shares at a strike price of 8.75p.

Simon Cole, CEO of 7digital, commented: 

"We are delighted to welcome Snowite to the Group. With major French customers in the retail, mobile entertainment and media sectors and a strong sales pipeline in French-speaking markets, Snowite will accelerate 7digital's international expansion while strengthening our relationships with French music labels and publishers. Snowite's platform and technology should also benefit our development roadmap and allow the Company to make cost savings in planned future platform investment."

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Enquiries:

7digital is a b2b digital music and radio services company. The core of its business is the provision of robust and scalable technical infrastructure and extensive global music rights used to create music streaming and radio services for a diverse range of customers - including consumer brands, mobile carriers, broadcasters, automotive systems, record labels and retailers. 7digital also offers radio production and music curation services, editorial strategy and content management expertise.

7digital fosters industry growth and innovation by simplifying access to music for clients such as Onkyo, Guvera, Global Radio and The Overflow. From years of being the largest independent producer of programming for the BBC, launching Radioplayer in multiple territories, and powering services for partners like HMV, Panasonic and ROK Mobile, 7digital is perfectly positioned to lead innovation at the intersection of digital music and next-generation radio services.