Music streaming service Pandora has finally found a buyer investor. The company has been attempting to find someone to fund it and help it grow, in face of a balance sheet that did not look particularly healthy. The company has now agreed to a hefty, $480 million investment from SiriusXM.
Reportedly, Sirius was interested enough in the service to want to purchase Pandora outright. However, Pandora did not quite see eye to eye with Sirius when it got to the valuation the latter was putting to the music streaming service. And hence, the companies agreed upon a middle ground, with Sirius making a strategic investment in the firm.
Under the terms of the deal, Pandora will receive a strategic investment of $480 million. Meanwhile, Sirius will receive a significant say in the company, up to the ability to choose three new members of Pandora’s board of directors and anoint a new chairman.
Speaking on the topic, Sirius XM CEO Jim Meyer 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.
He added:
Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets.
The music streaming service also had to sell Ticketfly as a condition associated with the deal. That would have been fine but the company ended up selling the company to Eventbrite for merely $200 million. Whereas it purchased the same for $450 million a couple of years ago. So the company actually ended up taking a loss of $250 million in the process.
Pandora Director Tim Leiweke said:
We are pleased that the conclusion of our strategic review resulted in a major investment by a world class company like SiriusXM, and with the sale of Ticketfly, we will now redouble our focus on execution supported by a strong balance sheet.
The infusion will help Pandora better compete with the likes of Apple Music, Spotify and Amazon Music Unlimited. However, with 3 directors chosen by Sirius, the firm will have a significant say over matters of future strategy.
