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Modern Media Acquisition Closes Combination with Music Streaming Platform Akazoo
Monday 16 September 2019

16 September 2019 - US-based special purpose acquisition company Modern Media Acquisition Corp. (NASDAQ: MMDM) has closed a merger with UK-based digital music streaming platform Akazoo Ltd in a transaction that would value the combined company at approximately USD 469m, the company said.

Under the definitive agreement, MMDM and Akazoo will combine under a new holding Company domiciled in Luxembourg, which intends to list on the NASDAQ Stock Market under the symbol "SONG" following completion of the transaction.

In its ninth year of operation, Akazoo is a music streaming service specialising in emerging markets with 4.3m premium subscribers in 25 countries throughout Europe, South East Asia, South America and Africa.

MMDM is a special purpose acquisition company formed for the purpose of effecting a merger, acquisition or similar business combination sponsored by Modern Media, LLC, an entity jointly owned by Lew Dickey, MMDM's chairman and chief executive officer, and an affiliate of Macquarie Capital.

The combined company will continue to be led by Akazoo's experienced management team under a leadership of Apostolos N. Zervos, Akazoo's Founder and chief executive officer. Lew Dickey will serve as chairman of the combined company.

This transaction will combine Akazoo and MMDM under a new holding company, Holdco that will become the publicly traded entity.

After giving effect to any redemptions by the public stockholders of MMDM of their MMDM shares and the payment of transaction fees and expenses, the balance of the approximately USD 212m in cash currently held in MMDM's trust account will be available to Holdco to fund future growth.

As a result of the transaction, each share of MMDM common stock will convert into the right to receive one share of Holdco and each warrant to purchase MMDM common stock will convert into a warrant to purchase an equal number of shares of Holdco on the same terms as the MMDM warrants.

Also as a result of the transaction, the holders of MMDM's currently outstanding rights to purchase MMDM common stock will receive, as to each right, 0.1 shares of Holdco.

The existing Akazoo shareholders will receive an aggregate number of Holdco shares equal to an assumed Akazoo enterprise value of USD 380m (less any cash payment to them) divided by the per share redemption price applicable to the redemptions by the public stockholders of MMDM.

Existing Akazoo shareholders will receive a cash distribution of up to USD 20m, in exchange for a portion of their shares, if and to the extent that cash available in MMDM's trust account, after the payment of transaction fees and expenses and any redemptions, exceeds USD 110m.

Founded in 2010, Akazoo is a UK-based, global, on-demand music streaming subscription company with a focus on emerging markets. Akazoo's Premium service provides subscribers with unlimited online and offline high-quality streaming access to a catalog of over 45m songs on a commercial-free basis.

Akazoo's free, ad-supported Radio service consists of over 100,000 stations and exists as a separate application.

With a presence in 25 countries and growing, Akazoo's platform includes 37m registered users and 4.3m premium subscribers as of September 30, 2018.

Akazoo directly licenses music from thousands of labels and provides both online and offline listening platforms, social media integration, and a patented, AI-driven new music recommendation engine.

MMDM is a Delaware corporation formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation, recapitalisation or other similar business combination with one or more businesses. MMDM raised USD 210m on its initial public offering and began trading on NASDAQ in May 2017.
Details
Date Published: 16/09/2019
Target: Akazoo Ltd
Country: UK
Deal Size: 469m (USD)
Sector: Media
Type: Merger
Financing:
Status: Closed
Vendor:
Buyer: Modern Media Acquisition Corp
Comment:
Terms of the deal were not disclosed

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