Today Viggle announced that they would be acquiring GetGlue for $25 million. However that acquisition can only happen if Viggle is able to successfully complete a “convertible debt financing equal to or greater than $60 million” as detailed in an 8-K form filed by the company. Viggle is currently in the process of receiving two large and strategic investors as part of that $60 million investment.
The 8-K states:
“Consummation of the Merger is subject to various conditions, including, among others, (i) the absence of any law or order prohibiting the consummation of the Merger, (ii) all consents, approvals, permits and authorizations having been obtained, and (iii) Viggle receiving gross proceeds from a convertible debt financing equal to or greater than $60 million. Viggle has received indications of interest and commitments from various strategic investors with respect to its convertible debt financing. In addition, Viggle?s and AdaptiveBlue?s respective obligations to consummate the Merger are subject to certain other conditions, including, among others, (i) subject to the standards set forth in the Merger Agreement, the accuracy of the representations and warranties of the other party, (ii) compliance of the other party with its covenants in all material respects, (iii) no event, change, effect or circumstance occurring that would constitute a material adverse effect on the other party.?
Viggle is a public company and that raised $67 million in funding when they were a startup. Viggle chairman and CEO Robert Sillerman funded half of that funding by himself. Viggle stock is trading at $1.40 per share and their market cap is $104.59 million. Adage Capital and Baron Funds are other large shareholders in Viggle.
One out of two of the largest strategic investors are believed to be a large consumer electronics company like Samsung or Motorola. It is believed that this company would be interested in integrating GetGlue into their Connected TV products. The break fee if the acquisition does not go through is believed to be around $500,000.
GetGlue has around 3 million users and the service is similar to Foursquare. Instead of “checking in” to a venue, GetGlue encourages you to check in to TV shows, movies, and sports.
On top of the $25 million acquisition price, GetGlue would also receive around 48.3 million shares of stock. At $1.40 per share, that adds up to around $67.6 million.
All 34 GetGlue employees will work at Viggle following the acquisition including founder and CEO Alex Iskold. Before rebranding as GetGlue, Mr. Iskold was running his startup under the name AdaptiveBlue. I first wrote about AdaptiveBlue in May 2007.
AdaptiveBlue has raised around $24 million in funding since they launched and rebranded as GetGlue. Viggle uses audio verification technology to reward users for returning to their favorite TV shows. These real-world prizes are based on points provided from Hulu Plus, Fandango, Best Buy, iTunes, and Amazon.com.