WHAT: After two years of speculation that Kohlberg Kravis & Roberts wanted out of its investment in BMG, it appears that it was Bertelsmann's idea to buy out the private equity firm, as the ­Germany-based media giant wanted full control of the music ­company. According to sources, Bertelsmann is paying KKR $390 million for its 51% stake in BMG in a deal that values BMG at $1.4 billion. The amount paid to KKR translates into only about a 28% stake, but apparently Bertelsmann is taking on all of the company's debt. Billboard estimates that BMG has about $650 million in debt, if one extrapolates a 51% stake to be $730 million and subtracts the cash paid to KKR. Currently, BMG generates almost $400 million in annual revenue.

WHY: KKR makes a cool $130 million for its four years' participation in BMG, if one considers that it put up $260 million and took out $390 million. Supposedly, KKR was looking for an even bigger pay day, but after losing out on first Warner Music Group and then EMI, it apparently decided it didn't want to stick around to see if Sony Music Entertainment would ever come up for sale. As for Bertelsmann, it now has 100% control of BMG, which marks its full-time return to the music business. When Bertelsmann and Sony merged in 2004, the company took turns managing the assets first with Andy Lack in charge and then Rolf Schmidt-Holtz. But eventually Bertelsmann grew disenchanted with the music biz and sold its share to Sony in 2008.

WHO: While BMG has implemented its roll-up of publishing and master rights catalogs, it has spawned a lot of millionaires along the way. It started out small enough, buying S1 Songs for $16.5 million, according to sources. But then it was off to the races, paying $300 million for Bug Music, $75 million for Cherry Lane, $80 million for Evergreen Copyrights and $168 million for Chrysalis. It also bought the Rosetta catalog, which largely consists of Virgin Music Publishing, for $90 million. And it acquired the Sanctuary catalog for $60 million and the Mute catalog for $10 million. That adds up to nearly $800 million in acquisitions, but doesn't include the acquisitions of Stage Three, Francis Dreyfus Music and the Adage IV catalog, since the terms of those deals haven't been disclosed.

IF: BMG is positioning itself as a deep-pocketed, new-model music company, to be seen as an alternative to the majors. So far, it doesn't like to take on the risky developing-artist business, and instead is focusing on the less costly new-songwriter business. While it has acquired master recording catalogs, it likes to work with established artists where the income stream can be predictable, like publishing income. While it has its own infrastructure, BMG CEO Hartwig Masuch says he'll let artists choose how their albums come to market. If they prefer going through someone else, like one of the majors or an independent label, that's OK with him.

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