It’s no secret that Americans love their television, making the US one of the most lucrative media markets which Ai-Media (ASX: AIM) is set to capitalise on with acquisitions of Caption IT and CaptionAccess to significantly increase their footprint in the TV-loving nation.
The acquisitions will complement Ai-Media’s existing captioning and transcription services and consolidate the sector where Caption IT offers a white-label reseller product to corporate clients and CaptionAccess provides communication access services to government agencies and the education sector, including 23 universities.
Combined, the two acquired businesses generate USD $2.2 million annually and once added to Ai-Media’s existing services, North America will account for half of the Company’s total revenue.
“Both CaptionAccess and Caption IT have been built on foundations of high-quality service delivery to loyal enterprise customers with values and cultures that are strongly aligned with Ai-Media,” said Ai-Media CEO, Tony Abrahams.
CaptionAccess and Caption IT will also open up further opportunities for acquired clients to access Ai-Media’s cloud-based platform which offers speech-to-text transcription in real time through a combination of human and artificial intelligence. These transcriptions can be applied to live broadcasts and translated in real time into various languages.
These acquisitions are Ai-Media’s most significant corporate move since the Melbourne-based media-tech company listed on the ASX in September 2020, successfully raising $65.5m from their IPO at an Offer Price of $1.23 per share.
In response to the COVID-19 pandemic, Ai-Media has seen an increase in demand for video and transcription services which have been driven by the adoption of video as a means for core communication. This has been further highlighted by the rise in remote learning and work-from-home meetings where Corporate clients seek high-speed and high-accuracy services.
Total consideration for the CaptionAccess and Caption IT acquisitions will be USD $1.6m cash, funded from existing cash reserves, and $0.3m in AIM shares.
Ai-Media expects the acquisitions to have an incremental positive impact to earnings where they recently reaffirmed their Prospectus forecast revenue of A$43.8 million in FY21 before announcing these acquisitions.