Entertainment One to buy UK-based Audio Network
By Michele Maatouk
Date: Thursday 11 Apr 2019
(Sharecast News) - Peppa Pig owner Entertainment One has announced the acquisition of UK-based Audio Network, a creator and publisher of original music for use in film, television and advertising, for £178m.
The cash consideration will be partially financed by a placing to raise approximately £130m, before expenses, which represents around 6% of the company's market cap.
Entertainment One said the acquisition enhances its presence in music, a rapidly growing sector, with attractive growth that is complementary to its music, film, television and family brands businesses.
Audio Network derives revenue from sync licensing, approximately 60% of which is annual subscription based revenue, and publishing royalties, generating highly recurring and predictable cash flow. ETO said the business is creatively led and data-informed, mixing human curation and music supervision with automation to build search and discovery capabilities.
Entertainment One said the deal will strengthen its growth, margin and free cash flow profile by scaling its music business combined with Audio Network to annual revenue exceeding £75m proforma as of 31 March 2018. The transaction is expected to be accretive to earnings per share in the financial year ending 31 March 2020, including revenue opportunities and cost synergies.
Chief executive Darren Throop said: "As we continue to unlock the power and value of creativity for artists, we are very pleased to welcome Audio Network, whose passionate management team and ambition align with ours.
"The combination of eOne's front-end commercial artist catalogue and Audio Network's premium diversified music catalogue creates a one-stop solution for business customers seeking high-quality music."
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