Women in Music 2016

Alliance Entertainment Becomes Biggest Physical Wholesaler in the U.S.

Justin Tallis/AFP/Getty Images
A customer picks up a copy of "Blackstar" the latest album by British musician David Bowie in a branch of HMV in central London on Jan. 11, 2016. 

The negotiations between Alliance Entertainment and Anderson Merchandisers, previously reported by Billboard, has produced a purchase agreement whereby Alliance Entertainment will acquire the music assets and business of ANconnect LLC, a subsidiary unit of Anderson. The deal makes Alliance the largest physical wholesaler in the U.S. -- and, with Target, one of the two biggest physical music accounts. 

Alliance Entertainment in Talks to Acquire Anderson -- Move Would Make Company Biggest Physical Wholesaler in U.S.

The result will see Alliance Entertainment purchasing, managing and shipping music inventory for merchants like Walmart and Best Buy. The retailer's stores will continue to be serviced by the Anderson merchandising team. Billboard estimates ANconnect's music revenues from servicing those retailers at about $350 million, while Alliance Entertainment has revenues of about $700 million.

In addition to rack-jobbing Walmart and Best Buy, Anderson Merchandisers also owns the U.S. distribution pipeline that services DADC, the Sony Corp.-owned CD and DVD manufacturer that serves its own home-entertainment, music, video and videogame business, while also providing those services to Universal Music Group, among other customers. Anderson, which entered the music rack-jobbing business in 1994 when it acquired Western Merchandisers, bought the DADC pipeline for the U.S. in September 2012.