Audioboom to buy AI and neuro-linguistics firm to boost advertising offer

Spoken word platform Audioboom has agreed to buy SONR, a neuro-linguistic programming and artificial intelligence development company, in a £1.42m all-shares deal, but is awaiting approval from some of the vendors.

SONR develops algorithms which will allow Audioboom to accelerate the introduction of intelligent data management platforms that will better inform programmatic ad-serving solutions and audio recommendation engines over the next 12 months.

Its algorithms are currently capable of generating "audience specific data-points", which the AIM-listed company felt could be developed for brand advertising targeting, combined with the integration of audio-to-text transcription technologies, to allow it to build ad-server solutions for targeted advertising.

SONR also has social media search and discovery products, which Audioboom said will enhance its syndication and distribution, which will raise advertising rates.

Audioboom will issue of 56.9m new shares of 2.5p each.

The holders of 76% of the issued share capital in SONR have agreed to sell their stake, conditional on approval by shareholders who have 90% the share capital, and regulatory approval. If approval is not gained by 31 March, the deal will no longer go ahead.

If the deal does go through, Audioboom will move to buy the remaining balance of SONR’s share capital.

For the 2015 calendar year SONR made a loss after tax of £1.5 and had net assets of £4.3m.

The company has also issued a new £1m convertible loan note to Candy Ventures, in order to support working capital for both Audioboom and SONR. With the convertible loan note, the company will have about £1.31m in cas. It is targeting positive cash-flow in the first quarter of 2018 and it will consider further financing options this year to ‎fund it through to the breakeven cash position.

Rob Proctor, chief executive of Audioboom, said: "Neuro-linguistic programming and artificial intelligence are set to affect all key elements of the digital industry and, therefore, all of our lives. Audioboom already has first mover advantage in digital audio ad placement. SONR's ground-breaking sentiment and context analysis algorithms will allow us to place Audioboom in the vanguard of this burgeoning market.

“The continued support of Candy Ventures, via the convertible, demonstrates their confidence in the management's strategy and future plans for the company. The funds will be used to integrate SONR's leading edge neuro-linguistic programming and artificial intelligence technologies into Audioboom's ad-server solutions and platform and support the working capital requirements of the combined Audioboom and SONR businesses."

Shares in Audioboom were down 7.27% to 1006 GMT.