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7digital's B2B acquisition could see it becoming a major player in Europe's media streaming market

London-headquartered media streaming business 7digital has announced it has acquired a European B2B provider of digital music services and lined up a string of new contracts to cement its position in the European market.

The firm has agreed a £2.2m stock and cash deal for 24-7 Entertainment ApS, a Copenhagen-headquartered competitor that powers the digital music service Juke! By European entertainment and consumer electronics retailer MMS.

The deal, which is expected to complete on 21 June, will also see MMS become 7digital’s largest shareholder, with £2.2m being fulfilled through the transfer of shares to MMS along with an initial £900k cash payment from 7digital’s coffers.

Simon Cole, Chief Executive of 7digital, said the acquisition marked the completion of the firm’s trajectory to becoming a ‘globally dominant’ player in the media streaming market, which was just getting off the ground when the firm originally launched.

He commented: “MediaMarktSaturn is of central importance to the European music industry as it builds from a year in which the importance of streaming to future revenues has been confirmed.

“For one of the world’s top retailers of music to make the statement MMS is making by committing to this digital strategy sends an important signal about broadening the digital services available to consumers.”

The agreement also marks a significant boost for 7digital’s balance sheet which Cole said would ‘nearly double’ licensing revenues and ensure ‘positive cashflow’ for 2018.

Contracts with MMS include a three year contract for the existing Juke! services which total £11m as well as a new contract for the development of future services which totals £6m.

Wolfgang Kirsch, COO MediaMarktSaturn Retail Group and CEO MediaMarktSaturn Deutschland, said: “As the number one music retailer in Europe, music streaming is increasingly important for us.

“Being a shareholder of 7digital will enable us to strengthen our digital entertainment service Juke! and develop further business models for the growing music streaming business.”

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