Kobalt Music Group in talks to sell majority stake to Francisco Partners, say MBW sources

Last year was a big year for Cobalt Music Group. The company celebrated its 20th anniversary in 2021 by selling AWAL to Sony Music – a deal that left Cobalt to focus on its core music publishing business, as well as digital collection society AMRA.

2022, however, could be an even bigger year in the company’s story.

Senior MBW sources tell us that the US-headquarters Francisco Partners Advanced talks are currently underway to acquire a majority stake in Cobalt Music Group, with an agreement likely to be signed in the next week or two.

Francisco Partners is no stranger to the music business.

The San Francisco-based, tech-focused investment firm acquired a majority stake in music production platform Native Instruments earlier this year for an undisclosed fee.

With offices in San Francisco, London and New York, Francisco Partners has raised more than $24 billion in committed capital since its launch two decades ago. It has invested in over 300 technology companies.

Other music-related investments by Francisco Partners in recent years include Eventbrite, which has received financing from the investment firm Max. $225 million in 2020.

MBW sources tell us that, should Francisco Partners’ majority-acquisition of Cobalt Music Group be completed, Willard Ahdritz – Cobalt’s founder and executive chairman – will remain a shareholder in the music company, and continue to play a major role in its future. will continue. strategy.

“Today the full list of Cobalt’s shareholders is actually quite long and a bit Byzantine,” said a source close to Cobalt’s business. “The majority acquisition by Francisco will bring clarity and stability to Cobalt’s ownership – not to mention growth capital to accelerate AMRA’s expansion globally.”

When contacted by MBW about this story today, a Cobalt spokesperson said the company “does not comment on rumors or speculation”.

According to documents filed with Companies House in the UK, Cobalt Music Group’s total revenue (not including asset management fees) in fiscal year 2021 (12 months to the end of June 2021) was $519.4 million.

he was up 1 1% on the basis of the same vs on the basis of $465.9 million This was posted in the prior year.

By how much did the publishing division of Cobalt increase its revenue in FY 2021? 9.6% To $478.4 millionOver that $436.1 million in prior year.

AMRA’s Annual Revenue Toppers $100 million Hitting for the first time in FY2021 $109.8 million, he was up 40.2% vs prior year ($78.3m,

Overall, in terms of gross collections (including asset management fees), Cobalt says it generated $548 million In FY2021, up 15% Yo.

(Gross collections represent Cobalt’s overall revenue, plus the fees it received for its role as an advisor/asset manager of the fund that bought the music.)

Since publishing those figures, Cobalt has told MBW that it is now forecasting company-wide gross collection revenue. USD $625 million us Present Financial year (by the end of June 2022).

Cobalt is also anticipating that it will almost end the current fiscal $65 million In EBITDA profit.

Last year, Cobalt sold two of its company’s banner territories – AWAL and Cobalt Neighboring Rights (KNR) – to Sony Music in a $430 million deal.

(The above FY2021 figures do not include revenue from AWAL or KNR.)

Meanwhile, Cobalt’s investment management arm, Cobalt Capital, facilitated the sale of two music-owned funds in total over the past two years. $1.4 billion,

According to bloombergIn Q1 of this year, Cobalt Music Group successfully raised $550 million in debt financing from JPMorgan Chase & Company and HPS Investment Partners.

Cobalt reportedly intends to use these funds to build its ownership list of music rights through acquisitions.worldwide music business

Kobalt Music Group in talks to sell majority stake to Francisco Partners, say MBW sources

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