The Wrather Corp. purchased Muzak in 1957, followed by Teleprompter in 1972, then Westinghouse in the early ‘80s. It has been recently confirmed that it has entered into a definitive agreement to be acquired by Mood Media Corporation (TSX:MM/ LSE AIM:MM), a leading in-store media specialist, for an enterprise value of up to approximately US$345 million.
Mood Media’s acquisition of Muzak will create a global in-store media provider servicing over 470,000 commercial locations in over 39 countries. In the U.S., the combined business will serve over 200,000 national and 100,000 franchisee locations. The combined customer base will include more than 850 U.S. and international brands in diverse market sectors that include retail (food, fashion, cosmetics), leisure and hotels, oil and gas, telecommunications, financial institutions, and fast food. Together Mood Media and Muzak will have an extensive music library that includes 1.7 million rights-included tracks and more than 30,000 original recordings, which means customers will benefit from greater product choice.
The company intends to maintain a significant presence in the Charlotte, North Carolina area, with its U.S. headquarters in Fort Mill, South Carolina.
In the transaction, the outstanding indebtedness of Muzak will be repaid in full at the closing and Mood Media will acquire the outstanding equity securities of Muzak through a merger of Mood Media’s wholly owned subsidiary with and into Muzak in which preferred unit holders will receive a cash payment equal to 80% of the redemption value of the preferred units at the closing. Additional merger consideration, which is not expected to exceed approximately US$60 million in the aggregate, may be payable following closing first to preferred unit holders, in an amount not expected to exceed approximately US$19 million, with the remainder payable to common unitholders, in each case contingent upon certain events, including, among other things, the performance of Muzak in the three years following the closing. These potential payments are subject to contingencies and there can be no assurance that any such amounts will in fact be payable. The acquisition remains subject to customary closing conditions, and expected to be completed in the second quarter of 2011.