Scripps Acquires Triton Digital

EW Scripps Company RadioWhile Scripps is exiting radio station ownership, it will be beefing up its audio tech services with the acquisition of Triton Digital for $150 million.

Triton, which is currently owned by Vector Capital, will join Scripps’ growing on-demand audio business that includes the podcast distribution platform Stitcher and podcast advertising service Midroll. Scripps will continue running Triton as a separate company with its current leadership team led by co-founder/CEO Neal Schore.

In the acquisition Scripps is emphasizing Triton’s two main business models: 1) It’s audio streaming and ad insertion and 2) digital audio measurement with an emphasis on the latter. Not mentioned is Triton’s additional broadcast services such as its website hosting for clients including Cumulus Media.

The E.W. Scripps Company (NASDAQ: SSP) is acquiring Triton, the global leader in digital audio technology and measurement services, helping Scripps advance its strategies for near- and long-term value creation.

Triton serves the growing digital audio marketplace through a software-as-a-service (SaaS) business-to-business revenue model. Triton powers or measures streaming music and podcasting for many of the biggest names in audio, including Pandora, Spotify, NPR, iHeart, Entercom, Cumulus, Prisa (Spain), Mediacorp (Singapore) and Karnaval (Turkey).

Triton’s infrastructure and ad-serving solutions deliver live and on-demand audio streams and insert advertisements into those streams. Triton’s data and measurement service is recognized as the currency by which publishers sell digital audio advertising.

Financial highlights include:

  • The purchase price is $150 million.
  • The transaction will be financed with cash on hand.
  • Triton will be immediately accretive to company margins.
  • Triton’s 2018 revenue is projected to be approximately $40 million, with EBITDA projected in the mid-teen millions.
  • Triton’s 2019 revenue is projected to grow in the low to mid-teens percent range over 2018.
  • The revenue multiple for the transaction is about 3.7x; the EBITDA multiple is about 9x.
  • This is a stock acquisition, and therefore there is no step-up in the assets for tax purposes.
  • Scripps President and CEO Adam Symson said the acquisition is consistent with the company’s growth strategies and operating performance goals.

“Triton positions Scripps well to expand its role in the fast-growing global digital audio marketplace. Triton’s efficient business model, multiple growing revenue streams, competitive advantages and expanding international footprint made this an attractive opportunity.”

Over 12 years, Triton has become the industry standard by which digital audio is measured, said Symson, while its infrastructure and ad-serving solutions are fueling growth for the world’s top audio companies.

“The acquisition of additional television stations remains our No. 1 M&A priority, with the goal of enhancing our national scale and in-market depth for our Local Media portfolio,” said Symson. “On the National Media side, acquiring Triton complements our strategy of owning growth businesses that capitalize on the evolving habits of media consumers and furthers our commitment to margin expansion.”

The global digital audio marketplace is projected to grow to $14.8 billion in 2022, according to Statista, as consumers increasingly turn toward streaming audio services. The industry growth comes as a result of the ubiquity of smartphones, the popularity of connected cars and the explosive growth of smart speakers in homes.

Triton has two lines of business:

Measurement: Triton’s measurement technology platform is the standard in the digital audio marketplace. Triton’s metrics are the currency through which agencies and brands buy digital audio advertising from streaming and on-demand audio companies.

Infrastructure: Triton provides its clients with hosting and advertising infrastructure to deliver digital audio streams with data-powered dynamic ad insertion to listeners worldwide.

“Since its inception, Triton has partnered with the largest and most successful audio companies across the nation and around the world to support the growth of the streaming audio ecosystem,” said Triton co-founder and CEO Neal Schore. “Joining Scripps, a company known for its focus on the future of media, will support our continued innovation and will strengthen the products and services we offer to our clients here in the U.S. and as we continue our expansion across the globe.”

Schore brings more than 26 years of experience in media, including having served as the chairman of Westwood One. Schore and his veteran management team will continue to lead Triton.

The transaction is set to close before year end. Moelis & Company served as financial advisor to Triton for the transaction.

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