The new funding comes via the sale of a tranche of newly-place C class shares in the UK-based company.
Having originally announced last week that it was looking to raise £200m ($249m) via the share sale, Hipgnosis was oversubscribed, and has confirmed today (July 10) that the C share placing actually ended up creating gross proceeds of £236.4m ($299m). That qualifies as Hipgnosis’ biggest equity raise to date.
The firm told investors today that its investment adviser – The Family (Music) Limited – is currently “in active discussions on a pipeline of catalogs with an acquisition value of over £1bn”.
As a result, the company expects to have spent up its new bag o’cash within the next three months.
“This is our biggest fundraise to date, and the biggest fundraise by a LSE listed investment trust since the COVID-19 lockdown, which speaks volumes for the financial community’s recognition of Songs as an asset class.”
Merck Mercuriadis, Hipgnosis (pictured)
Merck Mercuriadis, Founder of Hipgnosis Songs Fund Limited and The Family (Music) Limited, said: “Our mantra is that proven songs produce predictable and reliable income and are a highly investable uncorrelated asset class that can rival gold. I’m very grateful for the incomparable support we have had from our great institutional investors from day one and delighted that they are now, with us having become one of the biggest yielders on the FTSE 250, joined with significant participation from the retail sector.
“This is our biggest fundraise to date, and the biggest fundraise by a LSE listed investment trust since the COVID-19 lockdown, which speaks volumes for the financial community’s recognition of Songs as an asset class. In line with our current performance we will do our utmost to continue to deliver strong results for our investors by buying extraordinarily successful proven songs by culturally important artists and managing them with great responsibility.
“At the same time we will use the influence of our great songs and financial wherewithal to bring reform to the way the songwriter is remunerated. The songwriter is unjustly at the bottom of the traditional music business economic equation, our intention is to take the songwriter to the top!”
Following admission of all of the new C Shares, in two stages, by next Thursday (July 16), Hipgnosis will have 615,851,887 Ordinary Shares and 233,446,307 C Shares in issue.
MBW revealed last week that Hipgnosis Songs Fund saw its revenues grow to £64.7m (approximately $81m at current exchange rates) in the 12 months to end of March 2020.
The stat, revealed in the company’s new annual report, is up by many multiples on the £7.2m it generated in the year to end of March 2019.
At time of publication, Hipgnosis is carrying a share price of 121.45 GBX on the London Stock Exchange, giving it a market cap value of £747.95m ($946m).
An influx of circa $300m in trading via the C share sale, of course, will elevate that market cap comfortably beyond the billion dollar barrier.Music Business Worldwide