Modern Media (MMDM) Announces Business Combination with Akazoo Ltd.


Modern Media (MMDM) Announces Business Combination with Akazoo Ltd.

Jan 24, 2019 INTEL by Kristi Marvin

Modern Media Acquisition Corp. (MMDM), announced early this afternoon that they have signed a definitive merger agreement to combine with Akazoo Ltd, a global digital music streaming platform based in the United Kingdom.  The transaction would value the combined company at an implied enterprise value of approximately $469 million. Akazoo specializes in servicing emerging markets with 4.3 million premium subscribers in 25 countries throughout Europe, South East Asia, South America and Africa.

The combined company will continue to be led by Akazoo’s management team under the leadership of Apostolos N. Zervos, Akazoo’s Founder and Chief Executive Officer. Lew Dickey, who is the current President, CEO and Chairman of Modern Media, will serve as Chairman of the combined company.

The combined company is expected to re-domicile in Luxembourg and list on the Nasdaq Stock Market under the symbol “SONG” following completion of the transaction. [Side note:  the Luxemborg domiciliation might be due to Brexit issues, but right now that’s just a guess]

Quick takes:  Putting aside for the moment “music streaming” as a sector, Modern Media has a right included in its unit and we’ve seen how detrimental that can be to a combined company’s share price post-closing if the transaction is not well-received (see: IAM/WINR (Smaaash changed its name and symbol) or DOTA/RBZ). Plus, ideally a business combination target is at least 3x the size of the SPAC (or even larger) to overcome the dilution of the warrant overhang (and rights), but the Akazoo transaction is well short of that goal.  Having said that, music streaming is still largely under-penetrated as a market and even more so in emerging markets, in which Akazoo has a first-mover advantage. However, music streaming as a sector is not something we’ve ever focused on.  You’ll need an expert for that.  The dilution in this deal is what’s pinging on the radar.


Each share of Modern Media common stock (“Company Common Stock”) will convert into the right to receive one PubCo Share (Pubco = the Luxemborg redomiciled public entity), and each warrant to purchase Company Common Stock (each, a “Company Warrant”) will convert into a warrant to purchase an equal number of PubCo Shares (each, a “PubCo Warrant”) on the same terms as the Company warrants. Also, as a result of the transactions, the holders of the Company’s currently outstanding rights to purchase Company Common Stock will receive, with respect to each right, 0.1 PubCo Shares.

Existing Akazoo shareholders will receive an aggregate number of PubCo Shares equal to an assumed Akazoo enterprise value of $380 million (less any cash payment to them) divided by the per share redemption price applicable to any redemptions by public stockholders of the Company.

The existing Akazoo shareholders prior to the Luxembourg Merger will receive a cash distribution of up to $20 million, in exchange for a portion of their shares, if and to the extent that cash available in the Company’s trust account, after the payment of transaction fees and expenses and any redemptions, exceeds $110 million.

Condition to closing: the funds contained in the Company’s trust account and any additional capital otherwise available to the Company must not be less than $60,000,000.



  • Macquarie Capital acted as lead financial advisor.
  • Jones Day and Greenberg Traurig LLP served as legal counsel to MMDM.
  • Loeb & Loeb LLP and Phanar Legal served as legal counsel to Akazoo.