Viggle, GetGlue TV App Merger Plan UnravelsViggle, GetGlue TV App Merger Plan Unravels 1/20/2013 7:00 PM Eastern
The wedding of second-screen startups Viggle and GetGlue has been called off , after Viggle apparently failed to land financing for the deal.
Both New York-based companies have developed mobile apps that let TV viewers “check in” to shows, giving advertisers and networks a way to connect with fans. In November, Viggle announced plans to buy GetGlue in a deal that could have been worth more than $80 million in cash and stock.
But the deal was contingent on Viggle raising convertible debt financing equal to at least $60 million. The agreement was terminated on Jan. 13 “because the transaction did not close by the merger agreement’s outside date,” Viggle said in a regulatory filing.
“We are moving forward as an independent company,” GetGlue CEO Alex Iskold wrote in a blog post last week, adding: “The two companies remain friendly and think highly of each other.”
For its part, Viggle said the termination of the agreement was “cordial.” Viggle is obligated to pay up to $500,000 in breakup fees to GetGlue, whose investors include Time Warner Inc.
Viggle, whose stock is traded over-the-counter, has been burning substantial amounts of money as it tries to get traction in the nascent second-screen space (see “TV’s Kickback App,” Sept. 17, 2012).
The company reported revenue of $2.05 million and a net loss of $19.5 million for the quarter ended Sept. 30, 2012, according to a regulatory filing. To date, Viggle has been kept afloat by founder and CEO Robert F.X. Sillerman, who has extended a $20 million line of credit to the company.
GetGlue, founded in 2007, now has more than 3.5 million users and 75-plus network and studio partners, according to Iskold. Viggle had 746,899 registered active users as of the end of 2012; last year, the company spent about $9.9 million on gift cards, credits and other rewards its users redeemed.