Mood Media Acquires Muzak

Muzak Holdings LLC, a provider of music, messaging and video for business, confirmed that it has entered into a definitive agreement to be acquired by Mood Media Corporation, an in-store media specialist, for an enterprise value of up to approximately US$345 million.
Mood Media reports that their 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 is estimated to 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 a music library that includes 1.7 million rights-included tracks and more than 30,000 original recordings.
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 reportedly 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. According to Mood Media, 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 unit holders, 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 is expected to be completed in the second quarter of 2011.