UK-based Hipgnosis Songs Fund Ltd just bulked up its acquisition warchest.
The company, run by founder Merck Mercuriadis (pictured), has secured a new £150m (approx $188m) revolving credit facility (RCF) via its subsidiary.
The money is being put up by a syndication of seven banks, including JP Morgan.
The facility refinances Hipgnosis’s £65 million RCF, originally lent by JP Morgan in August 2019, and is based on an independent valuation of Hipgnosis’ music catalogs.
Björn Lindvall, COO of Hipgnosis, commented: “We are very pleased to have been able to issue our first syndicated loan facility at incredibly good terms in these highly volatile markets whilst still being oversubscribed.”
“We are very pleased to have been able to issue our first syndicated loan facility at incredibly good terms in these highly volatile markets whilst still being oversubscribed.”
Björn Lindvall, Hipgnosis Songs Fund
Hipgnosis has spent more than $650m to date, on a catalog of over 11,000 songs. This catalog includes pieces of hits including Shape Of You, Uptown Funk, You Give Love a Bad Name, Single Ladies (Put a Ring on It) and Havana.
Law firm Herbert Smith Freehills advised Hipgnosis on both the £65m credit raise last year, and the newly-announced £150m facility (which comes with an uncommitted accordion, and is categorized as a New York law Net Asset Value-based RCF).
Gabrielle Wong, partner in Herbert Smith Freehills’ finance practice, commented: “Successful completion of this debt raising in the midst of a global pandemic is a testament to the confidence of investors in the robustness of Hipgnosis’ business and the evolution of songs as a valuable asset class.
“Successful completion of this debt raising in the midst of a global pandemic is a testament to the confidence of investors in the robustness of Hipgnosis’ business.”
Gabrielle Wong, Herbert Smith Freehills
“We are delighted to have advised Hipgnosis on yet another significant transaction. It is exciting to work with such a dynamic client and I look forward to continue supporting Merck and his team as they expand their business and go from strength to strength.”
Lindvall added: “I would like to thank Gabrielle and her team for their hard and diligent work, which in no small way was a determining factor in getting this deal across the finishing line in a successful way.”
Hipgnosis’ share price on the London Stock Exchange was GBX 101.00 at the time of publishing, which gives the company a market cap in excess of £620m ($778m), according to Google Finance.
Last month Hipgnosis acquired 100% of Richie Sambora’s publishing and writer’s share royalties in 186 songs, including his Bon Jovi hits.Music Business Worldwide