London-listed cash shell Electric Guitar [LON: ELEG] has entered into non-binding heads of terms to acquire 3radical, subject to regulatory approval.
Electric Guitar was one of the few remaining, small cash shells listed in London that had yet to initiative a reverse takeover. Electric Guitar said that the transaction was in line with the acquisition strategy it had set out last year.
Electric Guitar listed in London last year with the objective of targeting one or more acquisitions within the online advertising technology or digital marketing space. The cash shell’s backers are of the view that the entire adtech sector is on the brink of a fundamental technological revolution which could create significant opportunities for investors.
3radical is a consumer data acquisition and audience engagement solutions provider. The company helps organisations to listen to their consumers and adapt experiences accordingly by giving them the ability to earn consented data directly from their audience. Critically, this fosters humanised interactions through choice-driven journeys provided by 3radical’s gamification software.
3radical uses game science and comprehensive strategic services to shape and support the customer experience by creating a fair value exchange delivered directly to each recipient and optimised by data and real-time decisioning. The company operates globally through offices in North America, the UK and Asia Pacific and serves major brands across a broad range of industries.
“The marketing industry is increasingly driven by shifts in attitudes toward privacy which are driving marketers to focus on first-party data and customer experience – a People First strategy,” explained John Regan, CEO at Electric Guitar. “3radical’s sophisticated and consented-first-person technology, coupled with its worldwide market presence, made it a perfect choice for Electric Guitar to join forces with.”
On completion of the transaction, Electric Guitar’s intention is to cancel its listing on the Standard List of the exchange and seek admission of its ordinary share capital, as enlarged following completion of the transaction, to trading on the AIM Market.
“This is an exciting and important step in 3radical’s business of delivering the technology services that marketers need to power customer experiences in the post-privacy People First world,” said David Eldridge, chairman of 3radical. “Joining with Electric Guitar as a listed business provides 3radical with access to the funding and talent needed to accelerate our growth, and also the opportunity to integrate complimentary technology to enhance our offerings as together we aggressively pursue the significant market opportunity ahead.”
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The transaction, once completed, would constitute a reverse takeover under the listing rules of the stock exchange. As Electric Guitar is not yet able to provide full disclosure under these rules, it has requested from the Financial Conduct Authority, and been granted, a suspension of listing in its shares with immediate effect pending either the issue of an announcement providing further details on the transaction, the publication of a prospectus, or an announcement that the transaction is not proceeding.
This is standard procedure for a cash shell transaction of this type. A number of smaller cash shells were listed in the UK over the course of 2020-21, but most of these have now initiated RTOs. Their rationale is to provide private companies in specific sectors with a cost-effective path to the public market.
