For some time we’ve known that private equity firm New Mountain Capital (NMC) – majority-owner of music biz valuer Citrin Cooperman – has been in talks to acquire BMI. Now it looks like a done deal.
NMC, which has over USD $45 billion in assets under management, confirmed on Tuesday (November 21) that it will “lead a shareholder group” to acquire a majority stake in BMI.
The most surprising part of BMI’s official announcement today? NMC’s ‘shareholder group’ includes an arm of Google parent Alphabet.
As part of New Mountain’s investment, a BMI press release confirms, CapitalG – aka Google/Alphabet’s “independent growth fund” – will acquire a passive minority stake in the PRO.
CapitalG has previously invested over $4 billion into 55 companies, including the likes of Airbnb, Stripe and Lyft.
Another important piece of today’s announcement: BMI’s current shareholders will allocate $100 million of the proceeds of the proposed sale to songwriter, composer and publisher affiliates “in recognition of [their] creativity” shortly after the transaction closes.
BMI says that the allocation of this $100 million “will be in keeping with [BMI’s] distribution methodologies, which are based on performance levels over a set period of time”.
BMI adds in today’s announcement that it “will work to finalize an equitable payout plan for this allocation in the coming months”.
(BMI didn’t put a specific price on NMC’s takeover in its confirmation today. Sources have previously put the acquisition price in NMC’s offer at around $1.7 billion.)
The NMC transaction is subject to approval by BMI shareholders and customary regulatory approvals and is expected to close by the end of Q1 2024.
New Mountain additionally confirmed today that, as part of the proposed deal, it has reserved additional capital to fund “growth investments, new ventures and technology enhancements to help accelerate BMI’s long-term plan to maximize distributions for its affiliates and improve the service it provides to songwriters, composers and publishers”.
Mike O’Neill, BMI’s President & CEO, will continue to lead the company, along with his leadership team, following the closing.
“Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators.”
Mike O’Neill, BMI
“Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators,” said Mike O’Neill, BMI President & CEO.
“New Mountain is an ideal partner because they believe in our mission and understand that the key to success for our company lies in delivering value to our affiliates.
“We are excited about the many ways New Mountain will accelerate our growth plan, bringing new vision, technological expertise and an outstanding track record of strengthening businesses, all of which will help us build an even stronger future for BMI and our songwriters, composers and publishers.”
Added O’Neill: “I would also like to thank the BMI Board of Directors and BMI’s shareholders for their excellent stewardship and unwavering support of our creative community since the company’s founding in 1939.”
Pete Masucci, Managing Director at New Mountain, said: “BMI has been a trusted guide and champion of music creators from the beginning, and we are privileged to work with the company and its 1.4 million affiliates to build on that incredible legacy.
“We look forward to working together alongside Mike and his team to capitalize on those opportunities for the benefit of all BMI stakeholders.”
Pete Masucci, New Mountain
“There are numerous growth opportunities ahead for BMI with significant potential to generate more value for the work of its songwriters, composers and publishers. We look forward to working together alongside Mike and his team to capitalize on those opportunities for the benefit of all BMI stakeholders.”
“With our support, BMI is ideally positioned to drive this transformation as the only PRO in the world to combine an open-door policy to all music creators with the innovation and commercial drive of a for-profit business.”
Mike Oshinsky, New Mountain
Mike Oshinsky, Director at New Mountain said: “While the music industry has undergone a technology-driven transformation over the past two decades, music infrastructure, including the performing rights ecosystem has been slower to transform.
“There is tremendous opportunity to modernize this critical part of music infrastructure and ensure that long term royalty collections for songwriters, composers and publishers continue to grow.
“With our support, BMI is ideally positioned to drive this transformation as the only PRO in the world to combine an open-door policy to all music creators with the innovation and commercial drive of a for-profit business.”Music Business Worldwide