Some MBW sources close to the deal suggested the buyout, announced Thursday (December 16), cost Warner approximately $400 million; others suggested the final price was just north of that figure.
Now we know for sure: Warner paid $400 million, on the nose, to acquire 300…. and paid it out in cash.
According to an SEC filing posted yesterday (December 17), Warner purchased a US-based company called Theory Entertainment LLC, doing business as 300 Entertainment, on the day of the announcement (December 16).
That deal was pursuant to terms and conditions of a merger agreement between Warner Music and various involved parties.
The filing reads: “On December 16, 2021, Warner Music Group Corp. (the “Company”) purchased Theory Entertainment LLC d/b/a 300 Entertainment, pursuant to the terms and conditions of the merger agreement of the same date among Warner Music Inc. and MM Investment LLC, both wholly-owned subsidiaries of the Company, the Buyer Representative, Trifecta Merger Subsidiary LLC, Theory Entertainment LLC d/b/a 300 Entertainment and the Seller Representative.”
The filing further confirms: “The merger consideration was $400 million in cash, subject to adjustment for working capital, cash, indebtedness and expenses.”
Warner says it will publish the full text of the merger agreement in its next quarterly earnings update to investors.
To fund the acquisition, Warner appears to have used cash from a $535 million debt raise it announced last month.
Led by CEO Kevin Liles, 300 Entertainment is one of the most successful modern independent labels in the United States.
The company was originally founded in 2012 by Liles alongside his former Warner Music and Def Jam colleague, Lyor Cohen.
Their fellow co-founders at 300 were Roger Gold (now manager of Camila Cabello) and Todd Moscowitz, who recently sold a majority stake in his own demi-indie label – Alamo Records – to Sony in a nine-figure transaction.
Google/Alphabet was an early minority investor in 300, but has since relinquished this equity.
Subsequent to the Warner acquisition, 300 will continue to be run by Kevin Liles. In addition, Liles becomes CEO and Chairman of Warner’s Elektra Music Group.
300 Entertainment’s biggest artist successes to date include Megan Thee Stallion, Fetty Wap, and Young Thug.Music Business Worldwide