Podcast Host Liberated Syndication Acquires Internet Host Pair NetworksPress Release | 01/03/2018
PITTSBURGH, PA / ACCESSWIRE / January 3, 2018 / Liberated Syndication, Inc. (OTCQB: LSYN) ("Libsyn") announced today that it closed its acquisition of Internet hosting company Pair Networks, Inc. ("Pair") on December 27, 2017. Libsyn paid $13.5 million in cash and issued 1,579,613 shares of restricted common stock valued at $2.5 million to acquire 100% of Pair. The combined businesses represented approximately $23 million in annual revenue and approximately $7 million in EBITDA for 2017.
"We are very excited about the opportunities that come from combining these two great, long-standing, Pittsburgh-based companies," said Chris Spencer, Libsyn CEO. "We have tremendous confidence in Pair's leadership and employees and we intend to fuel revenue growth for the combined entities through sales and marketing investment, cross selling new and existing hosting products and streamlining network computing infrastructure."
In order to finance the transaction, Liberated Syndication borrowed $10 million under a newly established Senior Secured Credit Facility (the "Bank Facility") with First Commonwealth Bank, which also was closed on December 27, 2017. Borrowings under the Bank Facility are at variable rates which are at the borrowers' option. As of December 27, 2017, interest is set at LIBOR (London Interbank Offered Rate) plus 175 basis points, or 3.44%.
Pittsburgh-based Capital Foundry, LLC acted as advisor to the Company and Arranger for the Bank Facility.
As of December 31, 2017, the combined companies had approximately 82,000 monthly subscribers for hosting services. Management believes there are many cross selling opportunities including website and blog hosting services for podcasters, full-service WordPress solutions for website and blog development, domain name registration and hosting, as well as co-location hosting services for larger podcast networks, an area of significant potential growth in the podcasting industry.
"Podcasts are expected to continue to grow in popularity and have become an integral part of brand strategy along with websites, blogs, and social media outlets. Pair's hosting, domain and WordPress offerings are the tools podcast producers look for to develop online strategies to extend their reach," said Laurie Sims, Libsyn President. "Libsyn is often seen as a media company because of the type of content we host, but we are fundamentally a hosting platform. We have a lot of synergy with Pair and understand the monthly subscription business model. We are thrilled to add the Pair team, its reliable infrastructure, and world-class support they provide."
Additionally, Libsyn management believes there are growth opportunities to be had by capitalizing on Pair's vast computing infrastructure, cloud-based hosting services and utilizing Pair's highly regarded customer support team. Focused cybersecurity services is another area of additional revenue growth potential given recent threats and limited expertise for small and medium-sized businesses.
Management plans to host a shareholder conference call during the first quarter of 2018 to outline its plans for the combined companies in greater detail.
