FROM SONY’S NINE-FIGURE LABEL BUY TO SONGTRADR’S $50M FUND RAISE
There was some behind-the-scenes debate this week as to what Sony Music paid to buy a majority-stake in Todd Moscowitz’s Alamo Records.
One well-placed source told us that, whatever Sony paid, it valued Alamo at a whopping $250 million. Other sources close to the deal suggested that this mooted $250 million figure was an exaggeration.
All sources agreed that what reported (“Sony paid comfortably north of $125 million”) was true. The question is: how far comfortably north?
Further sources have since led us to believe that Sony Music paid somewhere between $125 million and $200 million for its majority stake in Alamo.
We don’t know the precise size of majority stake Sony acquired. But, for example, if it bought a 75% chunk of Moscowitz’s company for $190 million, that would indeed give Alamo a ≈$250 million valuation.
These guessing games don’t touch on perhaps the most interesting quirk of the deal, though: Alamo was originally launched as a JV with Universal Music Group.
As a result, Sony Music appears to have just paid a lump sum of anywhere up to $125 million (for 50% of Alamo) direct to UMG.
A nine-figure windfall landing in the bank account of UMG will no doubt please Bill Ackman, the CEO of Pershing Square Tontine Holdings (PSTH).
PSTH confirmed this week that it is acquiring 10% of UMG for $4 billion, and that these shares will become PSTH’s property after a further 60% of UMG is listed on the Amsterdam stock exchange in September.
As covered in Rolling Stone, PSTH is already hinting that it will be fixated on UMG’s bottom line in future – and, very possibly, on how much the major music company is spending.
The SPAC told its investors this week to look forward to “predictable, recurring revenue streams that require minimal capital despite high growth” from Universal, and reassured them that UMG offers “significant fixed‐cost expense base allowing for long‐term margin expansion.”
Whetting future shareholders’ appetite for fat profits, Vivendi recently applauded UMG’s “strict cost control” in the first three months of 2021.
In the same three months, and in stark contrast, Sony Music Group (SMG) made three nine-figure acquisitions (Paul Simon’s catalog; Kobalt‘s AWAL; Brazil’s Som Livre label). The Alamo acquisition suggests SMG chief Rob Stringer ain’t planning on slowing down this aggressive M&A strategy any time soon.
Elsewhere this week, Songtradr raised $50 million, Universal signed a deal with Snap, and Sony Music Australia chief Denis Handlin left the company after over 50 years, as ex-employees accused the firm’s Sydney HQ of harbouring a toxic workplace environment.
Sony Music Entertainment has made yet another major acquisition – this time in the world of US hip-hop and pop music – by buying a majority stake in Todd Moscowitz’s Alamo Records.
New York-based Alamo was founded in 2016 and has broken artists including Blackbear, Lil Durk and Rod Wave.
Update: sources tell us the deal was for a nine-figure sum, and that Sony paid comfortably north of $125 million.
We’re told Universal Music Group had a contractual first-option to buy the label, but agreed to let it go elsewhere.
Lil Durk and Rod Wave have each scored their first No.1 albums on the Billboard 200 this year with The Voice of the Heroes and SoulFly, respectively…
Pershing Square Tontine Holdings (PSTH), a US-based special purpose acquisition company (SPAC), is officially buying 10% of Universal Music Group.
PSTH confirmed on Sunday (June 20) that it had entered into a definitive agreement with UMG’s majority owner, Vivendi, to acquire 10% of outstanding ordinary shares in UMG for approximately $4 billion.
Later this year, after Vivendi completes the previously announced listing of UMG on Euronext Amsterdam, shares representing 10% of the music company will be distributed to PSTH shareholders.
Following the Amsterdam listing and PSTH share distribution, UMG will be owned 10% by Vivendi, 10% by PSTH, 60% as traded on the Amsterdam Euronext, and 20% by a consortium led by Tencent Holdings….
B2B music licensing marketplace Songtradr has raised USD $50 million in an oversubscribed series D funding round.
The round saw participation from Australian based institutional investors including Regal, Aware Super, Perennial, Argo and Greencape, as well as a follow-on investment from the founder and CEO of Wisetech Global, Richard White.
Now, there’s talk of a potential IPO for Songtradr – perhaps even as early as the second half of this year…
Universal Music Group (UMG) and Snap Inc have inked what the companies call an “expansive” and “multifaceted” global agreement.
The deal will allow Snapchat’s users to incorporate UMG’s catalog of recorded music and content into creative tools, including Sounds and augmented reality Lenses.
Under the terms of the multi-year agreement, UMG’s entire recorded music catalog is available on a global basis in Snapchat’s Sounds tool, including Search and curated Playlists…
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