Technology firm Tiny Ltd. has acquired a majority stake in Serato Audio Research, a leading global audio software company, in a transaction valued at US$66 million. The deal, facilitated by Roth Canada, involves a nuanced financial structure that combines common shares and cash payments.
The acquisition comprises US$23.6 million in Tiny common shares and US$42.4 million in cash, representing a 66% ownership interest in Serato. Financial analysts note the transaction's valuation implies a multiple of 3.2 times annualized revenue and 9.6 times adjusted EBITDA based on the nine months ended September 30, 2024.
Concurrent with the acquisition, Roth Canada played a pivotal role in securing additional financing. The firm co-led a C$20 million bought deal public offering of 17.4 million subscription receipts priced at C$1.15 per receipt. Additionally, Roth Canada co-led a C$36.1 million private placement of convertible debentures, bringing the total transaction financing to C$56.1 million.
The strategic acquisition signals Tiny Ltd.'s commitment to expanding its presence in the digital audio technology market. By securing a majority stake in Serato Audio Research, the company potentially gains access to innovative software technologies and an established global market presence.
This transaction represents a significant move in the technology sector, demonstrating the ongoing trend of consolidation and strategic investment in digital platforms. The involvement of Roth Canada, a CIRO-regulated dealer focused on emerging growth companies, underscores the transaction's complexity and strategic importance.
For Tiny Ltd., the acquisition could provide opportunities for technological synergies, market expansion, and potential revenue growth. The financial structure, which includes both equity and cash components, suggests a carefully planned approach to integrating Serato Audio Research into its corporate portfolio.
