UK-based streaming service Akazoo acquired by Lew Dickey’s Modern Media Acquisition Corp.


Subscription-based online music service Akazoo will be acquired by Modern Media Acquisition Corp. (MMAC), the company founded by ex-CEO of media group Cumulus, Lew Dickey.

The deal, which was facilitated by Australian capital investment and consulting firm Macquarie Group, will result in a renamed combined entity valued at $469-million, and (oddly) called Holdco. This business unit will trade on Nasdaq, where MMAC currently lives under the MMDM  ticker symbol. The new stock sign for Holdco will be SONG.

This complicated maneuver results in a simple outcome for existing investors, who will receive one-to-one transfer of shares, according to the press release.

Akazoo has been operating for nine years. The service specializes in music service to emerging markets — a key focus of big global players like Spotify and Napster. Akazoo is available in 25 countries, and owns 4.3-million premium subscribers. That’s a business for sure, and it will be interesting to start seeing quarterly financial reports.

MMAC lists these investment notes in the acquisition announcement:

  • Leading music streaming service with a customer base of 4.3 million premium subscribers across 25 different countries with a focus on emerging markets
  • Positioned to benefit from rapid-growth of music streaming industry
    • Music streaming now accounts for nearly 40% of global recorded music revenues, expected to account for 85% of global music revenues by 2030
    • Emerging markets are expected to be the fastest growing music streaming markets over the next decade due to the rapid rate of smartphone adoption, and to surpass developed markets in total subscribers by 2024
  • Successful hyper-local strategy for content curation and cultural relevance with first mover advantage
  • Key partnerships with regional and local telecom services and mobile messaging companies
  • Patented Music AI technology for real-time music recommendations, sonic analysis and automatic playlisting, fully integrated into core platform
  • Compelling financial profile, with expected growth from further penetration of existing markets, and expansion into new territories
    • Multi-year track record of profitability
  • Experienced management team with deep industry and market knowledge well-positioned to oversee organic growth and expansion into new territories
  • Active M&A pipeline

“We are excited to enter into this transaction with Akazoo,” said Lew Dickey. “Music streaming is one of the best secular growth stories in global media and entertainment, and Akazoo is a top global platform that we expect will benefit tremendously from an infusion of growth equity and a public currency to participate in further industry consolidation.”

Expect the deal to close by mid-year.

Brad Hill