9 July
2015
For immediate release
INTERNETQ PLC
('InternetQ', the 'Group' or the 'Company')
InternetQ raises c. €17m for Akazoo, its music streaming service
InternetQ plc (LSE-AIM: INTQ), a leading provider of mobile marketing and
digital entertainment solutions for mobile network operators and brands, is
pleased to announce a strategic investment into the Company's popular
subscription-based music streaming service, Akazoo, by a consortium led by
Toscafund Asset Management LLP ("Toscafund") and Penta Capital LLP ("Penta
Capital").
Tosca Penta Music LP ("Tosca Penta Music"), a special purpose investment
vehicle backed by Toscafund and managed by Penta Capital, is investing c. €17
million (£12 million) in cash into the UK registered entity that will hold the
Akazoo business, operations and platform. Concurrently, the shareholders of R&R
Music Ltd ("R&R Music"), the London-based IP/patent-powered music
recommendation and user profiling technology company, have agreed to contribute
their business to the new Akazoo group. The cash investment will be used to
grow Akazoo's operations and footprint and expand the new entity's proposition
across new verticals through continued development of the Akazoo platform and R
&R Music's technologies.
Based on the subscription terms of the new investment, the implied post-money
valuation of the enlarged Akazoo business (including R&R Music) at announcement
is approximately €104 million, with InternetQ holding c. 69.1% of the shares,
while Tosca Penta Music and R&R Music's founders and existing investors hold
the remaining shares. The enlarged business, headquartered in London, UK, will
be effectively debt-free at the outset and will have a dedicated board of
directors.
Iain Barrie Johnston, Non-Executive Director of InternetQ, and Panagiotis
Dimitropoulos, CEO and Founder of InternetQ, will be appointed Chairman and
member of the new board of directors respectively.
Apostolos N. Zervos, currently SVP of Akazoo at InternetQ, will be appointed
Chief Executive Officer of the enlarged business and David Ritchie, currently
CEO of R&R Music, will become Chief Strategy Officer.
Strategic Rationale
In light of the increasing demand for content streaming and related services
globally, and recent successes of Akazoo in penetrating blue chip customers and
large, attractive geographies, this transaction is particularly timely for
InternetQ. It provides significant new cash resources, IP, human capital,
operational and technological synergies and other related assets to further
build on the strong momentum of InternetQ's B2C services as a differentiated
and broad offering that is attracting a significant subscriber base globally.
Similarly, the structural separation of Akazoo aims to improve focus on
InternetQ's respective business lines, while maintaining control of both.
Panagiotis Dimitropoulos, Chief Executive Officer and Founder of InternetQ
commented:
"We are delighted to announce this landmark transaction for our digital
entertainment business and our Akazoo brand. We welcome Toscafund and Penta
Capital as business partners. We look forward to working together with the
founders and employees of R&R Music to drive synergies and grow the enlarged
business. Our music and digital entertainment business now has additional
ammunition to continue to innovate and serve real customer needs and desires
across the globe, and play an important role in enriching products and offers
for unserved verticals and geographies."
Eric Nicoli CBE, Chairman of R&R Music, commented:
"We're hugely excited to combine forces with the excellent Akazoo team to
create an entity which, when underpinned by the support of InternetQ and new
funding from Tosca Penta Music, will have the expertise, technology and
propositions to become an increasingly important international player in the
digital music, social media and data space."
Martin Hughes, CEO and founder of Toscafund, commented:
"It is always pleasing to meet and work with like-minded entrepreneurs that
judge success over a period of years. Having supported the development and
growth of R&R Music and its predecessor since 2007, it is a pleasure to move to
the next phase of growth in combination with Akazoo and the excellent
management teams of both businesses."
R&R Music was founded in London by David Ritchie and Eric Nicoli. R&R Music
works with all forms of content, but primarily focuses on music. It combines
patented algorithms, behavioural science, expertise with social media, and
human curation to create a highly innovative profiling and recommendation
engine and boasts a range of unique and compelling products and services for
music fans, artists, businesses and brands.
Penta Capital is a UK mid-market private equity investor. It currently manages
over £300 million of commitments from its funder groups. It has successfully
invested in a number of technology businesses in recent years, including the
recently announced exit of Six Degrees Group.
Toscafund, founded in 2000 and based in London, is a multi-asset manager of
institutional, private family and retail funds. Total funds under management
are presently $4bn.
Panagiotis Dimitropoulos, Chief Executive Officer, Veronica Nocetti, Chief
Financial Officer, Apostolos Zervos, the soon to be appointed Chief Executive
Officer of the new enlarged Akazoo business, and Eric Nicoli, Chairman of R&R
Music will host a conference call for analysts and investors to discuss the
announcement commencing at 8.30 am BST on Thursday 09 July 2015.
Dial in details are as follows:
Conference ID: 82005708
Participant FreeCall UK: 0800 073 1340
Participant Std International: +44 (0) 1452 569 393
Participant USA FreeCall: 1866 434 1089
An audio webcast will also be available with the URL link below: http://
wcc.webeventservices.com/r.htm?e=1022435&s=1&k=F9DB5CABA6D0A93601BDCC09E2187756
ENDS
For further details:
InternetQ T: +44 (0)20 3519 5250 / +30 211
101 1101
Panagiotis Dimitropoulos, CEO and Founder T: +30 697 811 7520
Veronica Nocetti, Chief Financial Officer T: +30 694 420 5275
FTI Consulting LLP
Charles Palmer / Chris Lane / Nicola Krafft / Karen Tang T: +44 (0)20 3727 1000
RBC Capital Markets
Pierre Schreuder / Ema Jakasovic T: +44 (0)20 7653 4000
Canaccord Genuity
Simon Bridges / Emma Gabriel T: +44 (0)20 7523 8000
About InternetQ plc:
InternetQ is a leading digital content and mobile marketing services company
with operations spanning Asia, Europe, Africa and the Americas. It offers
proprietary technology platforms to help mobile network operators, brands, and
media companies to conduct targeted, interactive and measurable marketing
initiatives on mobile devices. Its mobile value added services include Akazoo,
which allows consumers to purchase digital music content and Minimob, its smart
mobile marketing and advertising platform to conduct effective and measurable
campaigns on mobile phones and achieve user engagement and app
monetization. All of InternetQ's products are underpinned by the rapid global
growth in smart devices and the thriving app economy.
InternetQ is a publicly traded company listed on the AIM market of the London
Stock Exchange, under the symbol INTQ. For investor related queries, please
email: ir@internetq.com