Liberated Syndication Inc. (OTCQB:LSYN) (“Libsyn” or the “Company”), the industry’s leading podcast hosting platform, today announced it has entered into a definitive agreement to acquire AdvertiseCast, LLC (“AdvertiseCast”), one of the largest independent and fastest-growing podcast advertising companies. The combination of Libsyn’s 75,000 podcasts and AdvertiseCast’s premier advertising capabilities will accelerate revenue opportunities for podcast creators and provide advertisers with significant new inventory. The acquisition will position Libsyn to be the leading platform for both podcast hosting and monetization.
“I am thrilled to announce this acquisition. AdvertiseCast is a market leader in the podcast advertising space that will fit perfectly with our existing Libsyn 5 hosting platform. Since we began in 2004, our primary objective at Libsyn has been to enable independent podcasters by providing them with a strong set of tools to help them thrive,” said Libsyn President Laurie Sims. “AdvertiseCast expands our tool set to include a robust monetization solution that enables efficient host-read and programmatic advertising. We expect to generate meaningful revenue by offering the AdvertiseCast solution to Libsyn’s customers and leveraging the combined inventory to attract even more advertisers to the AdvertiseCast platform.”
Founded in 2016, AdvertiseCast’s self-serve marketplace enables podcast advertising for over 1,500 active mid- and large-tier podcasters currently on its network and allows advertisers and agencies to efficiently buy and manage advertising campaigns in the podcast sector. Since inception, AdvertiseCast revenue has grown rapidly, increasing 45% year over year in 2020 to approximately $12 million. AdvertiseCast has scaled profitably since inception with no outside investment.
AdvertiseCast Co-Founders Trevr Smithlin and Dave Hanley commented, “We founded AdvertiseCast with a podcast publisher’s mindset and believe it is a perfect fit with Libsyn’s creator-centric ethos. Given the large growth in the podcasting market, we felt this was the perfect time to join forces with Libsyn in order to accelerate the growth of our business. As a leader in the podcast hosting space, Libsyn has a world-class podcast hosting platform that will deliver meaningful inventory to our podcast advertisers. Advertising is still a very under-penetrated segment of the podcast market, and we believe we are strongly positioned to ride the advertising wave with Libsyn’s support.”
Under the terms of the purchase agreement, Libsyn will acquire all of the issued and outstanding membership interests of AdvertiseCast in consideration for a purchase price of up to $30 million, of which $18 million will be in cash, $10 million will be in newly issued Libsyn shares, and $2 million will be in the form of an earn-out, which is subject to the terms and conditions of the purchase agreement. Co-Founders Trevr Smithlin and Dave Hanley will remain with the company and enter into employment agreements as a condition to closing. The acquisition’s closing is subject to other customary closing conditions.
Libsyn is also pleased to announce it has received funding commitments of $25 million through a privately placed equity transaction (“PIPE”) in Libsyn. The financing will be led by existing shareholder Camac Partners, LLC and new shareholder Hudson Executive Capital LP, among other existing and new investors. Proceeds of the PIPE will be used primarily to fund the AdvertiseCast acquisition and to provide Libsyn with additional capital for other strategic acquisitions. The closing of the PIPE is subject to customary closing conditions and is expected to occur concurrent with the closing of the AdvertiseCast acquisition in Q2 2021.
Libsyn was represented by West Arrow LLC who served as exclusive financial advisor and Faegre Drinker Biddle & Reath LLP as legal counsel. AdvertiseCast was represented by Telos Advisors LLC who served as exclusive financial advisor and Burns & Levinson LLP as legal counsel.
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