Original publication: Mergermarket |
Sycamore Entertainment close to acquisition that would help enable uplist - CEO
Streaming media service Sycamore Entertainment Group is finalizing an acquisition expected to close in the first quarter of 2026, said co-founder and CEO Edward Sylvan.
The Seattle-based company, which lists under the ticker SEGI on the OTC Markets, has actively been looking to acquire a minority or majority stake in a motorsports or soccer team, with a targeted deal value between USD 20m and USD 30m, Sylvan said.
Sycamore is evaluating targets worldwide but would move an international team to the US post-purchase, the CEO noted.
“Our goal is to own a team for the purpose of producing content around the team while using the team as a marketing vehicle for our free-to-watch streaming app SEGI TV,” Sylvan explained.
SEGI.TV reaches more than 100 million US household televisions and 200 million mobile devices across Roku, Amazon Fire TV, Apple TV, Samsung Smart TV, and others.
Sycamore generates revenue through programmatic advertising but is not currently cash-flow positive. It plans to fund an acquisition through a combination of preferred debt and equity, Sylvan said.
Investment bank D. Boral Capital has agreed to raise capital on Sycamore’s behalf and to sponsor the company’s intended uplist to the NASDAQ Stock Exchange post-acquisition, ideally in the second quarter of 2026, the CEO added.
In 2022, Sycamore made a bid to buy a race team in Formula E but was unsuccessful due to a challenging capital-raising environment during COVID, Sylvan noted.
Sycamore acquires, markets, and distributes quality finished feature-length motion pictures, TV shows, and sporting events worldwide. It currently licenses its content.
“For every advertising dollar we make, two-thirds go to the content provider and technology provider. We want to own our own content so that percentage flips and we retain two-thirds,” Sylvan said.
Post-acquisition, Sycamore’s shareholder value and market cap, now around USD 2m, should reflect the newly acquired asset, according to Sylvan. A planned reverse stock split will further bolster its roughly USD 0.00040 stock price to meet the minimum USD 5 threshold to uplist, he said.
Sylvan said Sycamore “aims to follow the same path as FuboTV,” a sports streaming television service that started out on the OTC Markets, upgraded to the Nasdaq, and was acquired by Disney in October.
Sycamore has been listed on the OTC since Sylvan, 57, and his brother Terry, 59, founded the business in 2010 as a film and TV marketing and distribution company. The "perpetual start-up" expanded into streaming in late 2020.
Edward was a former equities trader with Scotia Securities and First Marathon Securities, as well as director at Beco International, overseeing the corporate structure department for small cap reverse mergers and acquisitions.
Sylvan said he and his brother own around 51% of Sycamore but anticipate their stake will drop to less than 15% after the anticipated acquisition and uplist.
Ongoing consolidation is expected to increase after Netflix’s impending USD 82.7bn acquisition of Warner Bros. Discovery, which just rejected a hostile USD 108.4bn counteroffer from Paramount Skydance, Sylvan said.
“While the guys up top fight it out for content acquisition and traffic, smaller companies like ours will have to consolidate to survive,” according to the CEO. If Sycamore’s acquisition and uplist is successful, Sylvan said Sycamore could be positioned to attract merger or sale attention as soon as late 2026.
Sylvan noted a trend towards live sports. He also said "subscription fatigue” is fueling a growing trend back to free-to-watch, ad-supported content. Multiple surveys show consumers are spending an average of around USD 70 a month, or USD 840 a year, on pay-to-watch streaming services.
The CEO identified other over-the-top (OTT) free-to-watch streaming services as Pluto TV, which was acquired by Paramount Global in 2019 for USD 340m, and Tubi, which was sold to Fox Corp. in 2020 for USD 440m.
In addition to content acquisition and distribution, Sycamore offers market specific publicity, promotion, media buying, theatrical placement, and print and advertising financing for theatrical domestic release.
The company has seven employees and additional offices in Los Angeles and Vancouver. Its market cap peaked at just shy of USD 40m in 2022.
Sycamore uses accounting firm Sadler, Gibb & Associates and securities attorney Stephen Laskero.
Originally published by Mergermarket. Reprinted with permission.