It wasn’t the outright purchase that has been long rumored, but SiriusXM has announced it is making a $480 million “strategic cash investment” in Pandora.

SiriusXM will purchase newly issued Series A convertible preferred stock of Pandora representing 19% of Pandora’s currently outstanding common stock and a 16% stake on an as-converted basis. As part of the investment SiriusXM will name three individuals to the Pandora Board of Directors and select one to serve as Chairman. SiriusXM has also agreed not to acquire more than 31.5% of Pandora’s equity without approval from Pandora’s Board of Directors.

Pandora and SiriusXM intend to use the capital to make targeted investments and capitalize on opportunities to build on its position in the streaming radio business. Timed with SiriusXM’s investment, Pandora has sold TicketFly to Eventbrite for $200 million.

SiriusXM (NASDAQ: SIRI) and Pandora (NYSE: P) today announced an agreement under which SiriusXM will make a $480 million strategic cash investment in Pandora.

Under the terms of the agreement, a subsidiary of SiriusXM will purchase an aggregate of $480 million in newly issued Series A convertible preferred stock of Pandora. SiriusXM purchased $172.5 million of Series A preferred stock upon execution of the agreement and has agreed to purchase the balance of the Series A preferred stock at a second closing. The Series A preferred stock will represent a stake of 19% of Pandora’s currently outstanding common stock and a 16% stake on an as-converted basis.

The Series A preferred stock is convertible into common stock at a purchase price of $10.50 per share. The conversion price of the Series A preferred stock is approximately a 14.2% premium to Pandora’s volume weighted average price for the 20-day period preceding June 9, 2017. The Series A preferred stock will bear a 6% cumulative dividend, payable in cash, accretion of the Series A preferred stock or a combination thereof.

Through this agreement, SiriusXM is making a strategic investment in the leading U.S. provider of ad-supported digital radio. With a loyal quarterly audience of nearly 100 million listeners in the U.S., Pandora is by far the leading player in the burgeoning digital audio advertising market. The capital provided through the SiriusXM investment will allow Pandora to make targeted investments and capitalize on opportunities to build on its position in the streaming radio business.

Jim Meyer, Chief Executive Officer of SiriusXM, said, “This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today. Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders.”

“Liberty Media has long recognized the strength of the Pandora brand and the opportunities in the ad-supported digital radio market,” said Greg Maffei, Chairman of the SiriusXM Board of Directors and Chief Executive Officer of Liberty Media Corporation. “We are very supportive of SiriusXM’s strategic investment.”

When the transaction closes, three individuals designated by SiriusXM will be named to the Pandora Board of Directors. One of those individuals will serve as Chairman and SiriusXM designated directors will serve as select Board committee representatives. With these appointments, the Pandora Board will be expanded to consist of nine directors.

“Pandora’s Board and management team are committed to driving stockholder value and have carefully evaluated alternative strategies as part of the process disclosed on May 8,” said Tim Leiweke, member of Pandora’s Board of Directors. “We are pleased that the conclusion of that process resulted in a major investment by SiriusXM. With this investment, we have the backing of one of the media industry’s most successful investors and significant capital to accelerate growth. Pandora is now poised to advance to the next stage of the company’s lifecycle. Lastly, this transaction ensures that Pandora stockholders get the benefit of additional capital from an important strategic investor who can help enhance stockholder value.”

“The investment from SiriusXM infuses resources to help Pandora continue to grow and innovate,” said Pandora CEO and founder Tim Westergren. “With the strategic review behind us, and a strong balance sheet, we look forward to focusing on business execution and the optimization of our strategy.”

In connection with the transaction, Pandora agreed with an affiliate of Kohlberg Kravis & Roberts to terminate their Investment Agreement announced on May 8, 2017, and pay KKR a termination fee of $22.5 million.

Pandora is required to redeem the Series A preferred stock on the fifth anniversary of the closing for an amount equal to its liquidation preference plus all accrued and unpaid dividends. Pandora can also redeem the Series A preferred stock at any time after the third anniversary of the closing if the daily volume weighted average price of Pandora’s common stock is greater than or equal to 175% of the then applicable conversion price for a period of at least 20 days during a 30 day trading window prior to the notice of redemption.

SiriusXM will be subject to certain standstill restrictions, including, among other things, that it will be restricted from acquiring additional securities of Pandora for 18 months. After that period and for so long as a director designated by it is serving on the Board of Directors, SiriusXM has agreed not to acquire more than 31.5% of Pandora’s equity securities without the approval of Pandora’s Board of Directors.

The second closing contemplated by the agreement is subject to customary closing conditions, including antitrust approval, and is expected to close by the fourth quarter. The agreement may be terminated by either party if closing has not occurred by February 1, 2018.

Additional information relating to the SiriusXM investment may be found in the Form 8-K that will be filed by Pandora with the U.S. Securities and Exchange Commission.

Allen & Company LLC and BofA Merrill Lynch are serving as financial advisors to SiriusXM and Jones Day and Simpson Thacher & Bartlett LLP are serving as its legal counsel. Centerview Partners LLC and Morgan Stanley & Co. LLC are serving as financial advisors to Pandora and Sidley Austin LLP and Wachtell, Lipton, Rosen & Katz are acting as legal counsel.