SOUND OF MU$IC
Indies merge to create major industry player
A pair of indie record companies just struck a deal to create a major player in the music industry — with a catalog that ranges from Daft Punk to “The Sound of Music.”
Los Angeles-based Concord Bicycle Music, which owns labels including Stax, Sugar Hill, Rounder and Kidz Bop, said Friday it has closed a deal to acquire Dutch company Imagem Music Group, which holds the rights to rock acts like Pink Floyd and Iron Maiden, as well as Rodgers & Hammerstein’s classic Broadway songs.
The merger creates a behemoth valued at more than $1 billion, industry sources said, as Imagem, owned by a Dutch pension fund ABP, fetched between $500 million and $600 million in the deal.
In addition to Rogers & Hammerstein hits like “South Pacific,” “Oklahoma!” and “The King and I,” Imagem owns the rights to pop artists like Mark Ronson, MIA and R. Kelly. The firm also has 250,000 copyrights, including compositions by Lin-Manuel Miranda and Irving Berlin.
Accordingly, the deal catapults Concord, which has completed close to 100 acquisitions in the past few years, into the company of the biggest US music labels, following on the heels of Universal, Sony, Warner and BMG.
“It makes us significantly bigger and being larger in this industry is important. It makes you more stable for future acquisitions. It puts you at the big table in a changing business,” Concord Chief Executive Scott Pascucci told The Post.
The Concord boss and his chairman Steve Smith were No. 81 on Billboard’s Power List this year. The transformative deal will no doubt attract the attention of big private equity firms looking to enter the music business.
“It puts us in the short list of the biggest music companies — the fifth depending on how you measure it,” Pascucci said. Still, he added that the merged company won’t be looking for a buyer.
Valuations in general have risen with Vivendi, the owner of Universal Music, recently suggesting its music label is worth as much as $22 billion. Meanwhile, music labels are seeing the benefits of a growing streaming industry, with revenue up 6 percent last year — the biggest growth in 20 years, according to trade group IFPI.
Imagem has the rights to Phil Collins, Pink Floyd, Steve Miller and Linkin Park. The firm also owns the world’s largest specialist classical music publisher, Boosey & Hawkes, with a catalog that includes Igor Stravinsky, Benjamin Britten and Richard Strauss.
Concord, has two divisions: Concord Music Group, which is mostly recorded music; and Bicycle Music, which oversees publishing and rights management.
Pascucci said the deal took a year of talks. It did so without an auction process.
“To say the obvious, we were willing to pay the right price, but it wasn’t the simplest of deals,” he said.
Concord is owned by Barings Alternative Investments, Sound Investors and 70 institutional and individual partners.
The deal was brokered by Lisbeth Barron and Barron International Group, which advised Concord along with Reed Smith. Imagem was advised by David Dunn and Robert Law of Shot Tower Capital and by Venable.