Music rights giant BMI to be bought by New Mountain-led group

(Reuters) – An investor group led by New Mountain Capital on Tuesday agreed to buy Broadcast Music Inc (BMI), the music rights company that represents top songwriters including Lady Gaga, Taylor Swift and Rihanna.

The terms of the deal were not disclosed. New Mountain Capital, which manages more than $45 billion in assets, will acquire BMI from its shareholders, the private equity firm said.

Reuters was first to report in July that BMI was exploring options including a sale after it ditched its non-profit model.

New Mountain said it has set aside additional capital to fund growth investments, new initiatives and technology upgrades to help BMI improve its offerings for songwriters, composers and publishers.

As part of the deal, CapitalG will pick up a passive minority stake in BMI.

After the deal closes, BMI’s current shareholders will also set aside $100 million of the proceeds from the sale for its distribution partners. The payout will be based on performance levels over a set period of time, BMI said.

The transaction is expected to close by end of the first quarter of 2024.

Created in 1939, BMI represents the public performance rights in more than 20 million musical works created and owned by more than 1.3 million songwriters, composers, and music publishers.

The songs are licensed to digital streaming services, radio and television stations and other music users.

BMI reported revenue of about $1.57 billion for the fiscal year that ended on June 30, 2022, and paid out about $1.47 billion to its songwriters, composers and publishers, according to its last annual report.

Goldman Sachs served as financial advisor to BMI and Fried, Frank, Harris, Shriver & Jacobson was the legal advisor. Moelis (NYSE:) & Co and Simpson Thacher & Bartlett advised New Mountain.