7Digital Buys Rival 24-7 for GBP2.2 Million, Shares Soar

Shares in 7Digital Group PLC (7DIG.LN) jumped Tuesday after it announced the acquisition of rival digital music company 24-7 Entertainment for 2.2 million pounds ($2.8 million) from Europe's biggest consumer electronics retailer MediaMarktSaturn.

The digital music firm said the deal makes MediaMarktSaturn it biggest shareholder with a 13% stake, and adds GBP5 million to 2017 revenue and more than GBP8 million in 2018. 7Digital provides technology for music and film retailer HMV's online music download store.

7Digital's total revenue was GBP11.9 million in calendar year 2016.

It will issue 23.1 million shares to MediaMarktSaturn and pay GBP900,000 in cash.

Copenhagen-headquarted 24-7's activities include providing a music download service to the telecommunications company 3 in Austria.

MediaMarktSaturn is a subsidiary of the German retail giant Metro AG (MEO.XE).

Shares at 0735 GMT, up 2 pence, or 40.9%, at 8 pence valuing the company at GBP12.4 million.

Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter: @RoryGallivan

(END) Dow Jones Newswires

June 20, 2017 04:29 ET (08:29 GMT)