{"id":340384,"date":"2017-05-09T05:23:50","date_gmt":"2017-05-08T21:23:50","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1486871"},"modified":"2017-05-09T05:23:50","modified_gmt":"2017-05-08T21:23:50","slug":"pandora-sells-150m-in-preferred-stock-to-kkr-to-fund-shift-to-on-demand","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/pandora-sells-150m-in-preferred-stock-to-kkr-to-fund-shift-to-on-demand\/","title":{"rendered":"Pandora sells $150M in preferred stock to KKR to fund shift to on-demand"},"content":{"rendered":"

<\/p>\n

Pandora is taking a cash infusion to maintain \u201ca strong balance sheet\u201d as it struggles to shift from radio to the increasingly popular on-demand streaming model. Private equity firm KKR has agreed<\/a> to buy $150 million in Series A preferred Pandora shares and be paid a 7.5% to 8% quarterly dividend, and KKR\u2019s\u00a0Richard Sarnoff<\/a>\u00a0will take a board seat.<\/p>\n

Here are the nuts and bolts of the deal:<\/p>\n

\n

\u201cKKR will purchase an aggregate of $150 million in a new designated Series A convertible preferred stock of Pandora. Pandora will pay dividends to the holders of the preferred stock quarterly at an annualized rate of 7.5% if paid in cash or 8% if paid in kind, at its option. The Series A preferred stock is convertible into common stock, cash or a combination thereof at a conversion price of $13.50 per share. The offering may be upsized to a total of $250 million should the Company determine to issue additional shares.\u201d<\/p>\n<\/blockquote>\n

Pandora bought the remains of failed on-demand streaming app Rdio back in 2015<\/a>\u00a0for $75 million cash. But it took the company a year and a half to build that foundation into Pandora Premium<\/a>, which launched in March. With a focus on simplicity, Pandora hopes to compete with Spotify, Apple Music, and other streaming services. But its late start means it may need the extra cash to build out more attractive features and do heavy marketing to change what people think of when they hear Pandora.<\/p>\n

Regarding KKR\u2019s investment, Pandora\u2019s CFO Naveen Chopra wrote \u201cA strong balance sheet gives us the ability to accelerate growth investments when appropriate and to compete aggressively in a rapidly changing, complex market.\u201d<\/p>\n

\"\"<\/p>\n

The new Pandora Premium on-demand streaming service<\/p>\n<\/div>\n

Pandora reportedly was approached for a takeover by Sirius XM radio<\/a>, and was reaching out to other potential acquisition suitors Bloomberg reported in December. Pandora apparently turned down a $15 per share offer from Sirius earlier in 2016. But in\u00a0January this year, Pandora announced it was laying off 7% of its workforce to cut costs. It beat analyst estimates in its Q4 earnings<\/a> report in February, yet its share price still dropped 4%. Today Pandora closed at $10.40 per share, but rose 3.85% in after-hours trading to $10.80 upon the KKR investment news.<\/p>\n

With radio becoming merely a feature of other streaming services, Pandora must reinvent itself. That will take time and money, but also the kind of product innovation like the Music Genome Project that made it the premier online music app of the 2000s. Being a little bit simpler than Spotify isn\u2019t going to cut it.<\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" Pandora is taking a cash infusion to maintain “a strong balance sheet” as it struggles to shift from radio to the increasingly popular on-demand streaming model. Private equity firm KKR has agreed to buy $150 million in Series A preferred Pandora shares and be paid a 7.5% to 8% quarterly dividend, and KKR’s\u00a0Richard Sarnoff\u00a0will take a board seat. Here are the nuts and bolts… Read More<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

\"\"\/ <\/p>\n","protected":false},"author":5817,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[25],"tags":[59,66,26],"class_list":["post-340384","post","type-post","status-publish","format-standard","hentry","category-technology","tag-media","tag-techcrunch","tag-technology"],"_links":{"self":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/340384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/users\/5817"}],"replies":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/comments?post=340384"}],"version-history":[{"count":0,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/340384\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/media?parent=340384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/categories?post=340384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/tags?post=340384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}