Digital music sales and streaming provider 7Digital is in reverse takeover talks with UK radio group UBC Media. A letter of intent has been signed that would see the combined firms listed on the London Stock Exchange and provide an eventual out for 7Digital investors. It is being financed in part by a $1.8 million convertible loan by UBC to 7Digital.
Investors have provided $18.5 million in funding for 7Digital since 2005, including a $10 million venture round last year. Chip designer Imagination Technologies, which owns stakes in both 7Digital and UBC Meida, is said to be a key player in the new deal. The combined companies would enter the public market with a valuation of about $80 million.
The two companies hope to finalize terms by December 16th and complete the deal by the end of April 2014. “I’m very happy that we are able to help 7digital’s impressive expansion and that we have agreed to try and make our two companies one,” said UBC CEO Simon Cole in a statement.
The combined companies have 5 million registered users, according to the statement. 7Digital music services can be found loaded on mobile devices by Samsung, BlackBerry, andT-Mobile.