Brightcom Group signs LOI to acquire US-based digital audio company

5paisa Research Team

Last Updated: 12th December 2022 - 11:16 am

The synergies between both the companies’ businesses and assets shall enhance Brightcom’s EPS by adding USD 45 million to its topline revenue, and USD 15 million to its EBIDTA.

Brightcom Group Ltd (BCG), a Hyderabad based digital marketing company, has signed a Letter of Intent (LOI) for the acquisition of a US-based digital audio company.

The acquiree company is an integrated digital platform that offers several programmed radio stations, digital brands and digital marketing services in many markets in the US. It owns and operates multiple assets, which now shall be acquired by Brightcom Group.

The deal shall be executed by way of an asset purchase transaction, subject to customary financial, legal, business diligence as well as regulatory approvals. The assets' acquisition value, including its net cash, is pegged at USD 102.5 million comprising USD 95 million in cash and USD 7.5 million of BCG stock.

Why this acquisition?

The digital audio advertising business is growing at a rapid pace. It is considered to be the second most popular digital activity. While the US markets already have 200 million active consumers in this segment, the worldwide user count is rapidly growing and is expected to exceed 1.5 billion by 2026.

With this acquisition, Brightcom Group shall foray into this rapidly growing digital audio advertising segment. This segment includes all ad revenue generated via pre and in-Stream Audio Ads that appear in music (that also contains several radio services) and podcast streaming services. This revenue shall include ad-supported free versions of premium subscription services or services funded by advertising.

At 12.09 pm, the share price of Brightcom Group Ltd (BCG) was trading at Rs 172, a decrease of 0.12% from the previous closing price of Rs 172.20 on BSE.