Jukebox, TouchTunes, Victory Acquisition Corp., digital music, music, interactive entertainment, place-based advertising, vending, vending machine, coin-op, automatic retailing, videogame, touchscreen
NEW YORK CITY -- Victory Acquisition Corp. has announced the termination of its planned merger with TouchTunes Corp. Through a special meeting of stockholders that closed on April 24, holders of more than 20% of Victory's common stock voted against the merger and sought conversion. As a result, the merger was not approved and Victory will be liquidated.
Under the proposed merger agreement disclosed on March 24, TouchTunes, and its main investor, VantagePoint CDP Partners LP, would have become a wholly owned subsidiary of Victory following approval of the merger by Victory's stockholders. The Securities and Exchange Commission in mid-April approved registration statements related to the proposed merger. Because the merger was not completed, Victory says it will pay or make reasonable provisions for all existing claims and obligations.
Victory was a special purpose acquisition company, commonly known as a SPAC. SPACs are an option for startups looking to go public, but unable to find attractive prices through IPOs. They usually raise millions of dollars and then search for a suitable acquisition target. During normal economic times, financial experts say, TouchTunes would be considered an ideal IPO candidate. The jukebox media company is the second-largest seller of digital music in the U.S., behind Apple.
If the deal had been approved, it would have placed TouchTunes on a public stock exchange and given it access to equity capital to fuel growth for its digital jukebox services, PlayPorTT entertainment terminals and Barfly place-based advertising application. TouchTunes is presently in 38,000 U.S. locations.
The deal between TouchTunes and Victory involved $330 million in stock, plus the assumption of $40 million in debt. According to the Wall Street Journal, the merger was envisioned after Victory president Jonathan Ledecky learned about the jukebox business through a friend in the film industry who was interested in partnering with TouchTunes.
In 1994, Ledecky founded US Office Products, which quickly grew into a leading office products business with revenues of $2.6 billion by 1998. USOP expanded into office refreshment and vending services, naming the division USRefresh. It completed over 260 acquisitions and became a Fortune 500 company. Ledecky stepped down as chairman of the company in 1998. By 2002, USOP dissolved and sold off its office coffee and vending businesses.
Ledecky teamed up with Eric Watson, a London-based investor, who serves as chairman, to create Victory. Combined, they have founded more than 25 companies and completed over 400 acquisitions. Victory completed its initial public offering in May 2007, offering 33 million shares at $10 apiece.