New York rock act Interpol has parted ways with indie home Matador Records and will sign a new deal with Capitol, sources say. The group is now being managed by Dave Holmes, whose clients also include

New York rock act Interpol has parted ways with indie home Matador Records and will sign a new deal with Capitol, sources say. The group is now being managed by Dave Holmes, whose clients also include Capitol flagship artist Coldplay.

Billboard.com understands the group will hit the studio in the fall to begin recording its third album, which is tentatively due in mid-2007. In July, the group wrote on its Web site that it had already spent six months crafting material but had yet to begin recording.

The quartet found immediate success with Matador thanks to its 2002 debut, "Turn on the Bright Lights," which has sold 438,000 copies in the United States, according to Nielsen SoundScan. Its 2004 follow-up, "Antics," has shifted 435,000 units, and debuted at a career-best No. 16 on The Billboard 200.

With its Matador contract up, the band was a highly coveted free agent in recent months and was courted by a number of major-labels. Sources say Capitol had expressed interest in Interpol as early as 2001, when label president Andy Slater met with the band prior to its signing with Matador.

The news follows quickly on the heels of Capitol's signing of U.K. phenom Lily Allen, who scored a No. 1 single earlier this month with "Smile." The label also snapped up indie rock titan the Decemberists, whose label debut, "The Crane Wife," will arrive Oct. 3.