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Deezer to go public with €1.05 billion valuation
By Chris Cooke | Published on Tuesday 19 April 2022
French special purpose acquisition company I2PO has confirmed it has agreed a deal to merge with Deezer, a move that will result in the streaming music firm being publicly listed on the Euronext Paris stock exchange.
It was reported last week that a deal between I2PO and Deezer was close to being agreed. SPACs like I2PO are companies without any active operations that raise money on a stock exchange with the intent of using the cash to buy up privately owned businesses. When it did just that last year, I2PO confirmed it would use the monies it raised to enter the entertainment and leisure sector.
The two companies confirmed yesterday that they had now “entered into a definitive agreement for a business combination that [will] result in the combined entity, to be renamed Deezer, becoming a publicly traded company on the professional segment of the regulated market of Euronext Paris”.
Although one of the first subscription streaming services to launch, Deezer is a relatively small player in today’s music streaming market. While I2PO’s press release called Deezer the “second largest independent music streaming platform in the world” – because most of its main competitors are owned by tech giants like Apple, Amazon and Google – it is dwarfed by the largest independent platform Spotify.
At the end of last year, music consultancy MIDIA estimated that Deezer commanded around 2% of the premium subscription market, while Spotify has 31%. In yesterday’s announcement, I2PO confirmed that Deezer currently has 9.6 million paying subscribers, which compares to Spotify’s most recently declared subscriber count of 180 million.
However, plenty of people in the investment community remain optimistic about the future growth of the digital music market, and – as that market diversifies – there could be opportunities for established platforms like Deezer beyond simply signing up more people to a ten euro a month subscription. Plus, in its announcement, I2PO noted Deezer’s recent dabblings in the B2B space, powering music services for other media and digital companies, and in particular its partnership with RTL.
So, maybe it will all turn out fine. The new deal values Deezer at 1.05 billion euros. And there’ll be cash aplenty to help further grow the company in the years ahead thanks funds already held by I2PO and monies raised via a round of ‘private investment in public equity’ involving, among others, many of Deezer’s current shareholders – like Orange, Universal Music and Warner Music, as well as the biggest current shareholder, which is Warner’s parent company Access Industries.
Confirming all this, I2PO CEO Iris Knobloch said: “With its well-established brand, first-class management team and scalable platform, Deezer is poised to continue to capture a significant share in the booming music streaming growth. This is a perfect match and a transformational deal that will deliver long-term value creation for our shareholders as Deezer is a unique asset with considerable strategic avenues for future growth”.
“With Deezer’s hybrid B2B/B2C strategy to enter key international markets, its highly competitive technology and focus on ESG [environmental, social, and governance]”, she went on, “we are confident that the company is well-positioned to disrupt and consolidate while providing a high-quality music streaming service to millions of users around the world”.
Meanwhile, Deezer CEO Jeronimo Folgueira added: “Today marks an important milestone in Deezer’s history as we embark on a journey to become a publicly traded company on Euronext Paris. I am THRILLED to partner with I2PO who will provide us with the expertise, the global network and the capital we need to execute our strategic plan. We are uniquely positioned in the growing music streaming industry, with a very competitive product, a clear strategy and an experienced and renewed management team to seize this opportunity and create substantial shareholder value”.
