Leading Music Rights Organization SESAC to Be Acquired by Blackstone
January 04 2017 - 8:00AM
Business Wire
Leading music rights organization SESAC Holdings (“SESAC” or the
“Company”) announced today that private equity funds affiliated
with Blackstone (NYSE:BX) have entered into an agreement to acquire
the Company from Rizvi Traverse Management. This transaction is
Blackstone’s first investment as part of its core private equity
strategy, which is specifically designed to hold private equity
investments for much longer periods of time than traditional
private equity funds. Financial terms of the transaction were not
disclosed.
SESAC is the only U.S.-based music rights organization that
administers public performance, mechanical, synchronization and
other rights all within a single company. SESAC is able to offer
singular licenses for the works of its affiliated writers and
publishers that aggregate both performance and mechanical rights in
order to drive greater efficiency in licensing for music users, as
well as enhanced value for music creators and publishers. SESAC
recently expanded its activities to include the international
market through MINT, a joint venture with Swiss collection society
SUISA, that will license and administer music rights to digital
music platforms on a pan-European basis.
SESAC operates a sophisticated information technology and data
platform to provide timely, efficient royalty collection and
distribution, automating many core business practices that allow
for focusing greater attention on clients. Its growing sound
recording-matched composition database makes it the primary source
for real-time record release and publishing data as well as the de
facto database of record for the U.S. publishing industry. SESAC’s
30,000 affiliates include many of the most successful songwriters
and musicians in the industry, including Bob Dylan, Neil Diamond,
RUSH, Charli XCX (PRS), Zac Brown, Mumford & Sons (PRS), Lady
Antebellum, Mariah Carey, Axl Rose, Shirley Caesar, and Robin
Thicke.
SESAC Chairman and CEO John Josephson said, “We are excited to
partner with Blackstone. The long-term investment horizon of their
core private equity platform was especially attractive to us as we
seek to execute our company’s growth strategy in our primary
performance rights business, as well as mechanical rights,
administrative services, multi-rights and multi-territory
licensing. Blackstone is acquiring our company with the specific
intent of backing the existing management team, and shares our
long-term vision for the company with a history of adding value to
their portfolio companies as a supportive strategic partner and
capital provider. We anticipate a seamless transition in ownership
with no disruption to our business activities as a result of this
transaction. Going forward, we believe our long-term partnership
with Blackstone will position SESAC well for enhanced growth and
continued delivery of best in class service to our affiliates,
licensees and commercial partners.” Josephson added, “We would also
like to thank Ben Kohn and his partners and colleagues at Rizvi for
their strong support of SESAC during its ownership of the company
over the last four years, and key role in building the business
alongside the management team.”
Robert Reid, Senior Managing Director at Blackstone, said, “We
are thrilled to be backing John, Kelli Turner and the entire SESAC
team and investing in the most progressive music rights
organization for songwriters and artists. Music is fundamental to
our society and is consumed both actively and passively by users
worldwide, across increasingly diverse methods of distribution. We
expect music listenership to continue to grow over the long-term
and are excited to invest in SESAC, one of the key facilitators of
the music market and related copyright management
infrastructure.”
David Kestnbaum, Managing Director at Blackstone said, “We view
SESAC as an attractive fit for our core private equity investment
platform and are pleased to partner with the company’s experienced,
highly capable management team to help support their growth
strategy over the long term to continue to serve their key
affiliate and licensee constituents.”
Allen & Company LLC is acting as financial advisor to SESAC
with respect to the transaction and Akin Gump Strauss Hauer &
Feld LLP is acting as SESAC’s legal counsel. Moelis & Company
LLC and AGM Partners LLC are acting as financial advisors to
Blackstone with respect to the transaction, and Kirkland &
Ellis LLP is acting as Blackstone’s legal counsel. Goldman Sachs is
acting as financial advisor to Rizvi with respect to the
transaction. Jefferies is providing debt financing related to the
transaction.
The transaction is expected to close by the end of the first
quarter of 2017.
About SESAC
SESAC Holdings is the only U.S.-based Music Rights
Organization that administers public performance, mechanical,
synchronization and other rights. SESAC Holdings is able to offer
singular licenses for the works of its affiliated writers and
publishers that aggregate both performance and mechanical rights in
order to drive greater efficiency in licensing for music users, as
well as enhanced value for music creators and publishers. Its
businesses operate on a sophisticated information technology and
data platform to provide timely, efficient royalty collection and
distribution. SESAC’s subsidiaries are some of the most
well-known companies in music licensing and administration. SESAC
Performing Rights is the second oldest and most progressive
performing rights organization in the U.S. SESAC‘s acquisition
of The Harry Fox Agency (HFA) accelerated its transition
to a “multi-rights” organization with HFA’s deep publisher
relations and mechanical licensing history. SESAC Holdings has
offices in New York, Nashville, Los Angeles, Atlanta, Portland, San
Francisco, London and Munich.
About Blackstone
Blackstone is one of the world’s leading investment firms. We
seek to create positive economic impact and long-term value for our
investors, the companies in which we invest, and the communities in
which we work. We do this by using extraordinary people and
flexible capital to help companies solve problems. Our asset
management businesses, with over $360 billion in assets under
management, include investment vehicles focused on private equity,
real estate, public debt and equity, non-investment grade credit,
real assets and secondary funds, all on a global basis. Further
information is available at www.blackstone.com. Follow Blackstone
on Twitter @Blackstone.
About Rizvi Traverse Management
Rizvi Traverse Management is a private investment firm that
specializes in investments in the media, entertainment and
technology sectors. Past investments have included International
Creative Management, Summit Entertainment, Playboy Enterprises,
Facebook, Twitter, Snapchat, RealD, SpaceX and Square.
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version on businesswire.com: http://www.businesswire.com/news/home/20170104005784/en/
Media:SESACEdie Emery,
615-963-3496eemery@sesac.comorBlackstonePaula Chirhart,
212-583-5011paula.chirhart@blackstone.com
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