Streaming company Storytel has signed a deal to acquire Audiobooks.com from owner KKR for $135m (£101m), extending its reach into the English language audio market.
Audiobooks.com is a growing audiobook platform in the US and UK, part of the same RB Media stable as the UK's W F Howes and via the same owner, KKR, Overdrive. The deal could be disruptive to the audiobook sector and puts US and UK publishers on a possible collision course with Storytel, which operates a subscription model in Sweden and its current markets, a model the major UK and US publishers still eschew. Audiobooks.com, which according to Nielsen is used by about 17% of audiobook buyers, operates on a per title basis, or monthly credit similar to that used by the dominant Audible.
"With this acquisition, Storytel extends its trajectory of expansion and profitable growth to the largest English-language audio market in the world," Storytel said.
Jonas Tellander, c.e.o. and founder of Storytel, said: "I have been impressed by Audiobooks.com’s success, expertise and experience in the US market, as well as across the UK and Australia. Audiobooks.com is a growing profitable business with a consumer and partnership-friendly approach that offers Storytel a new platform for growth. I am now looking forward to working with our teams, publishers and partners to make audiobook listening as popular on the English-speaking markets as it has become in recent years in the Nordics."
Asked about whether Audiobooks.com would move to a streaming model, Tellander insisted it was “way too early” to say and the site would operate under its current models for now. He told The Bookseller: “We're interested in getting closer in our conversations with the UK and US publishers and have discussions on how we can grow the market together. For the Nordic market the audiobook is much more popular and more penetrated than what we see for the English speaking markets. We think there's a lot more room to grow.”
When asked about UK publishers' previous reticence to embrace streaming, he said: “There's no speculation whatsoever [about that]. Right now we're celebrating we've become the owners of Audiobooks.com and making sure it can develop in the best possible way and that we do that in sync with the rest of the book market, the publishers, the authors and and the customers of course.”
Tellander added the company would invest to drive growth in the UK and US after its success in the Nordic markets, ensuring “a good offering and good partnerships”.
The Swedish firm's subscriber base numbers more than 1.7 million and it has operations in 25 markets. Its catalogue includes more than 700,000 titles in more than 30 languages.
Its acquisition will be financed through Storytel's existing funds and a newly issued £43m bridge loan service, with a termination date in the first quarter of 2023, secured through Swedbank AB. The loan has been taken as part of an amendment to the company’s existing credit facility. The acquisition is expected to close at the end of December 2021, subject to customary regulatory approval.
“I am proud of the success that the Audiobooks.com team has achieved, positioning the company as one of the leading US services for audiobooks," said Ian Small, general manager at Audiobooks.com. "With Storytel, we join a group with an aligned vision and values that offer a solid base and global scale to address a market of hundreds of millions English-speaking consumers.”
Small will remain in his position following the purchase. He said: “With the combined industry expertise of Storytel and Audiobooks.com, we will continue to fuel the passion and interest of the English-speaking audiences and take our service to the next level."
The news comes after Spotify announced it was acquiring audiobook and streaming giant Findaway, extending its own reach into the sector.