Mood Media Corporation, a leading in-store media provider, has officially completed its acquisition of Muzak Holdings LLC for a total value of USD 345 million, inclusive of net debt repaid at closing. This acquisition positions Mood Media as a global leader in the in-store media market, serving over 470,000 commercial locations in 39 countries.
The combined entity now boasts a trailing last twelve months (LTM) revenue of approximately USD 400 million and an LTM EBITDA exceeding USD 100 million. The move enhances Mood Media’s capacity to deliver integrated music, voice, and digital media solutions to its extensive client base, which includes major retail chains and multinational corporations.
Lorne Abony, CEO and Chairman of Mood Media, expressed his enthusiasm for the completion of the deal, stating, “We are delighted to complete this transformative acquisition, which enables us to become a truly global leader in this space. We are excited and eager to begin realizing the significant growth opportunities and synergies in a combination that will benefit both our customers and our shareholders.”
Acquisition Details and Financing
Mood Media financed the acquisition through a combination of cash, convertible debentures, and share warrants. The total purchase price was structured as follows:
- USD 305 million in cash.
- USD 5 million in 10% convertible unsecured subordinated debentures, with an exercise price of USD 2.43 per common share, maturing on October 31, 2015.
- Warrants to purchase 4,407,543 common shares of Mood Media at an exercise price of USD 3.50, representing approximately 3% of Mood Media’s fully diluted common shares, expiring five years from issuance.
An additional contingent consideration of up to USD 30 million in cash may be paid over the next three years if certain minimum EBITDA targets are met.
Credit Facility and Private Placement
To support the acquisition and refinance its existing debt, Mood Media entered into new credit agreements with Credit Suisse Securities AG, including a USD 20 million 5-year revolving credit facility, a USD 355 million 7-year first lien term loan, and a USD 100 million 7.5-year second lien term loan.
Simultaneously, Mood Media raised USD 13.5 million through a private placement of 5,396,015 common shares at a subscription price of USD 2.51 per share. The proceeds were allocated to the cash component of the acquisition and general corporate purposes.
Strategic Impact
The acquisition is a strategic move that significantly enhances Mood Media’s ability to provide comprehensive in-store media solutions globally. Muzak’s brand and expertise in custom music, digital signage, voice messaging, and professional sound systems align with Mood Media’s offerings, expanding the company’s product suite and strengthening its footprint in multiple industries, including retail, hospitality, and restaurants.
About Mood Media Corporation
Mood Media is a leading in-store media specialist that uses music, visual, and scent media to enhance customer experiences and drive sales at the point-of-purchase. With operations across North America, Europe, Asia, and Australia, Mood Media provides customized media solutions to over 800 retail chains worldwide.
About Muzak
Founded over 75 years ago, Muzak is a pioneer in sensory branding, providing rich media-based solutions to clients in various sectors. Its services, which reach 100 million people daily, include custom music programming, digital signage networks, and voice messaging solutions.
For more information on Mood Media visit www.moodmedia.com
Stock Exchange Matters
The common shares issued in the private placement, along with those underlying the convertible debentures and warrants, have received conditional approval for listing on the Toronto Stock Exchange, subject to meeting the exchange’s customary conditions. The London Stock Exchange is also expected to list the new common shares on AIM, with trading anticipated to commence on May 9, 2011.
This acquisition marks a milestone for Mood Media, establishing it as a comprehensive global player in the in-store media industry and setting the stage for future growth and innovation.
