The Arena Group To Acquire Certain Assets Of Bridge Media Networks

(RTTNews) - The Arena Group Holdings, Inc. (AREN) on Monday announced that it has signed a binding letter of intent with Simplify Inventions, to acquire certain assets of its subsidiary Bridge Media Networks, a privately held media group with two national television networks.

Under the agreement, the existing assets of The Arena Group will be combined with the video programming, distribution, and production assets of Bridge Media Networks, expanding Arena Group's vertical business ecosystems.

As part of the deal, The Arena Group will receive a $50 million cash investment, and guaranteed advertising commitment of $60 million for five years from a group of consumer brands owned by Simplify.

The company intends to use a part of this cash to reduce its debt by $20 million from current levels. Furthermore, B. Riley Financial has agreed to extend the maturity of the remaining debt held by it from December 31, 2023, to December 31, 2026, at a fixed rate of 10%.

While, Simplify will receive $25 million of preferred stock at a 10% non-cash PIK coupon with a term of five years from the closing date, and 65% ownership of the combined company on a fully diluted basis based on $5 per share.

The transaction is expected to close in the fourth quarter of 2023, and the combination of the respective businesses is set to be completed in early 2024.