7Digital closes in on UBC Media merger
Deal with multimedia content producer could value Young Gun-founded streaming service at £50m
Online music streaming and download service 7Digital is closing in on a high-profile merger with multimedia content producer UBC Media, in a deal which could be announced as early as Monday.
The proposed merger was revealed in a statement released by UBC today, which said the two companies had signed a letter of intent and were working towards creating a new publicly-listed company by 16 December.
UBC said the deal would create a new company with nearly five million registered users across its services spanning 42 countries, and with a presence on around 60 million mobile devices.
It would represent the first public listing of privately-held 7Digital and could see the fast-growing tech firm valued at around £50m.
Founded in 2004 by Class of 2006 Young Gun Ben Drury, 7Digital provides music streaming and download services both on a direct-to-consumer and business-to-business basis.
Since launch it has grown its library to more than 22 million tracks and counts several household-name businesses amongst its clients including Samsung, BlackBerry, Microsoft, T-Mobile and HP.
The UBC merger and subsequent listing would represent a successful exit for 7Digital’s numerous backers, which include HMV, Dolby and microchip design firm Imagination Technologies.
UBC said it has already loaned £1m to 7Digital by way of the purchase of a convertible loan note in exchange for 3% equity, which will form the first part of the deal.
The second part will see 7Digital agree to purchase UBC and reverse into a stock market listing.
UBC Media is a publicly-listed multimedia company best known for its 34% holding in audio-sharing site Audioboo, which has seen strong growth in the last year – more than doubling UBC’s share price as a result.
UBC chairman Simon Cole will become executive chairman of the enlarged company with 7Digital founder Ben Drury taking the chief executive role, according to the Daily Telegraph.