Jukebox, coin-op, vending machine, music, digital music, TouchTunes
NEW YORK CITY — TouchTunes Corp. announced that it has merged with Victory Acquisition Corp. in a transaction that includes 33 million shares of Victory stock and the assumption of $40 million in net debt. The deal, announced on March 24, is expected to close at the end of April.
As a result of the merger, TouchTunes once again will trade on the Nasdaq or another national exchange. The combined company will operate as TouchTunes and will continue to staff offices in New York and Montreal. TouchTunes stockholders will be eligible to receive up to an additional 9.5 million shares based on the achievement of certain future EBITDA targets over the next five years.
"We believe that Victory's capital will allow TouchTunes to accelerate the EBITDA growth that TouchTunes has already experienced in its existing jukebox business," said Victory chairman Eric Watson. "With up to $310 million in equity capital at closing, TouchTunes should be able to expand its market presence and accelerate its already significant technology lead and distribution channel advantage."
Founded by investors Watson and Jonathan Ledecky, Victory Acquisition Corp. is described as a specified purpose acquisition company. It raised $330 million in an initial public offering in April 2007 and currently has the same amount in equity capital.
Founded in 1998, TouchTunes now supports about 38,000 digital jukeboxes on a network that plays some 700 million songs annually. It also operates the Barfly interactive TV network. The company’s new PlayPorTT portable entertainment system offers 50 family-friendly videogames; some 1,500 units are expected to be deployed by the end of the summer.
"We are excited about the merger with Victory because it will allow us to access significant equity capital to leverage our existing installed customer base, and rapidly roll out the Barfly and PlayPorTT product initiatives," said TouchTunes chairman and chief executive William Meder. "Our 38,000 locations generate over 3 billion consumer visits annually, providing advertisers with exceptional opportunities to interact with consumers.”