Verbit mulls merger with US co 3Play Media

Israeli transcription company Verbit is mulling a merger with Boston-based transcription giant 3Play Media, sources inform “Globes.” The merger would take place in collaboration with US investment bank Goldman Sachs and form a unified profitable company with annual recurring revenue (ARR) of $130 million.

Both Verbit and 3Play Media are privately-held companies in a market undergoing rapid change amid the transition from human transcription to completely automated transcription conducted with AI. The market has seen many mergers including Verbit itself, which has previously acquired seven US companies for more than $100 million.

3Play Media had a company valuation of $90 million more than a decade ago, and according to PitchBook was acquired in 2019 for an undisclosed sum by private equity firm Riverside Partner. Verbit received a valuation of $2 billion when it completed its most recent financing round in 2021. After the series of acquisitions it has completed in recent years, which has produced annual revenue of $80 million, a source close to the matter has told “Globes,” Verbit has $100 million cash and an available credit line of $50 million.

Verbit CEO Tom Livne, the only founder still at the company, is expected to step down before the end of the first quarter. He will become Verbit’s chairman and join Yaniv Jacobi’s Oryzn Capital venture capital firm, as managing partner. Oryzn was the first investor in Verbit. A new CEO will be hired although Livne is expected to retain his 10% stake in Verbit. The company is at a stage where tough decisions must be made in order to strive for profitability while adopting AI-based technologies in line with market expectations, and perhaps even to raise another financing round. Verbit is also expected to streamline before the end of the year.

No response has been forthcoming from Verbit.

Published by Globes, Israel business news – en.globes.co.il – on February 4, 2024.

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