Concord has acquired a mystery catalog in a deal valued at $217.3 million.
That’s according to a report published by Kroll Bond Rating Agency, which reveals that the funds used in the acquisition came from proceeds raised in Concord’s latest Asset-Backed Securities (ABS) transaction. This transaction saw the company raise $850 million in debt financing through a private securitization backed by its catalog of music rights.
The Kroll report doesn’t reveal the name of the other party in the catalog deal, but it does refer to them as a “a highly successful Latin Music artist and songwriter”.
The $850 million ABS transaction, referred to by Kroll as the issuance of the Series 2024-1 Notes, marks the third series of Notes issued as part of a broader $2.6 billion bond offering backed by music rights from Concord’s catalog.
The first series of notes (the Series 2022-1 Notes) arrived in 2022, totaling $1.8 billion, and was claimed at the time to be “the largest asset-backed securitization offering of music rights in the industry to date in terms of both size of issuance and number of assets (over one million copyrights)”.
Concord’s second series of notes (the Series 2023-1 Notes), totaling $500 million, was issued in October 2023.
According to the report issued by Kroll Bond Rating Agency, in addition to being used to acquire the $217.3 million catalog detailed above, proceeds from the latest transaction (the Series 2024-1 Notes), will also be used to repay the $500 million Series 2023-1 outstanding notes, “fund reserve accounts as needed, pay certain transaction expenses, and other general corporate purposes”.
Upon the redemption of the Series 2023-1 Notes, Kroll says it will withdraw the related ratings, and only the Series 2022-1 Notes and Series 2024- 1 Notes will remain outstanding.
Kroll’s report notes that Concord’s ABS transaction is securitized by royalties from its catalog of over one million compositions, master recordings, and related assets “from top artists and songwriters” including R.E.M, Creed, Genesis, Phil Collins, Mike + The Mechanics, and Carrie Underwood.
Kroll notes that “additional collateral was contributed into the securitization” in July 2024 following Concord’s acquisition of the Round Hill Music Royalty Fund Limited assets in 2023 and Mojo Music and Media (also in 2023), which Kroll’s report suggests were valued at a combined $606.3 million.
“Kroll’s report notes that an independent third-party has valued Concord’s catalog at $5.1 billion…”
Concord acquired Round Hill’s UK fund in a $468.8 million deal, which means that Kroll’s report suggests that Concord paid approximately $137.5 million for Mojo Music and Media’s assets.
Kroll’s report notes that an independent third party has valued Concord’s catalog at $5.1 billion, which takes into account the Round Hill & Mojo Assets as well as the ‘Recently Acquired Single Artist Catalog Assets’ i.e. the catalog of the highly successful Latin Music artist and songwriter.
According to Kroll’s report, Concord’s catalog was valued at $4.2 billion as of December 31, 2023.
Concord’s latest acquisition follows a series of major M&A moves at the company, including 2022’s eight-figure acquisition of Australia’s Native Tongue (and related expansion in Australasia), plus the ~$300m acquisition of music rights from Phil Collins and members of Genesis.
Last year, Concord bulked up its frontline recorded music credentials with the announcement of a JV label, PULSE Records, with the widely respected Pulse Music Group team. (Concord became a majority owner in Pulse Music Publishing via a $100m+ deal in 2020). PULSE has seen success in the US and globally this year with the Tommy Richman hit Million Dollar Baby (PULSE Records/ ISO Supremacy).
In May, Concord officially pulled out of the bidding war for the assets of Hipgnosis Songs Fund – leaving global investment giant Blackstone as the winner in the high-stakes takeover battle for HSF. (The bidding war for HSF started in the middle of April, when Concord, via Concord Chorus Ltd, launched a bid for HSF, Partly financed by Apollo Global Management).
Concord, which continues to be majority-owned by its long-term backer, State of Michigan Retirement Systems, entered into a process of exploring a sale itself (engaging Goldman Sachs as its wing-person) a couple of years ago.
That process led to a ~$5 billion takeover offer from an unnamed suitor, but this price-tag wasn’t deemed large enough for the company, which was looking for “extraordinary” offers only. Concord shut the process down and walked away.
Elsewhere in the music industry, in March, Kobalt confirmed the raise of $266.5 million via its first-ever Asset-Backed Securitization (ABS) transaction, backed by music royalties from a catalog of more than 5,000 works from 66 writers.
Also in March, HarbourView Equity Partners secured approximately $500 million in debt financing through a private securitization backed by its catalog of music royalties.Music Business Worldwide