Roth CH V (NASDAQ:ROCL) announced this morning that it has slackened its grip on a possible deal with Slacker, allowing the letter of intent with the podcasting platform expire and breaking off further talks.
The two initially announced their LOI with a proposed enterprise value of $160 million in April and said at the time that the deal would hinge on how much capital the SPAC would be able to raise.
Roth CH V saw about 78% of its trust redeemed at an extension vote days after the LOI announcement, despite securing some shares with non-redemption pacts. That left it with about $25.9 million in its trust.
Slacker is a subsidiary of Los Angeles-based LiveOne (NASDAQ:LVO), which announced it expected to generate $51.7 million in revenue from its audio division last quarter of which Slacker accounted for $26 million. This was a profitable period with the division generating about $5 million in adjusted EBITDA.
This positive news may have also contributed to the parting of ways with Roth CH V. At the time the LOI was announced, LiveOne was struggling to cut costs, manage its debt and get itself to profitability. It had reported $74 million in total revenue in the nine months ending December 31, 2022, which was a decline from $93 million over the same period in 2021.
But, over this time it also managed to cut its net losses to -$4.6 million, down from -$35 million a year before. With a turnaround already in progress, LiveOne may not have still seen the need for a spinoff, or viewed it as favorably considering Slacker accounts for about half of its revenue.
Roth CH V plans to seek out an alternative deal and has until December 3 do complete one under its current deadline.
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