The Allegro Media Group has signed a definitive agreement to acquire Mood Media's Somerset Entertainment label, a publicly-traded Canadian company.
While terms of the deal were not disclosed, Billboard estimates Somerset has about $40 million in annual revenues, which will inflate Allegro's annual revenue to about $120 million.
Somerset issues albums from its own rosters as well as licensing titles from the majors. According to Allegro chairman and CEO Joe Micallef, the label's top five sellers are Jim Brickman, Robin Meade, Nick Lachey, Jaci Velasquez and Jewel.
Two of Brickman's titles for the label, "Joy" and "Love," have sold about 150,000 units in the U.S., according to Nielsen SoundScan. Somerset is able to drive sales for its music by having its own in-store listening station featuring the label's titles in about 20,000 store fronts, Micallef says.
The deal means that Allegro now has relationship with eight of the top ten U.S. retailers and 50 of the top 70, many of whose only representation in music is its Somerset inventory.
Allegro, which started out as an independent distributor of classical music, has broadened its offerings to include producing and selling its own DVD content as well as branching out into rackjobbing in gas stations, truck stops, gift shops and other non-traditional retailers.
Moreover, down through the years it has made a series of acquisitions, acquiring N.A.I.L, an indie boutique distributor; Rounder Kids, a label and distributor specializing in children's product; Music Design, a distributor which specialized in New Age, Celtic and world music; and Softland, which supplies audio and video entertainment to the U.S. Marine Exchange Service as well as to other branches of the U.S armed forces.
Mood Media will retain ownership of DMX and Muzac, which provide in-store music playing services to tens of thousands of retailers.
Mood Media, when it was known as Fluid Music Canada, acquired Somerset in November 2009. At the time, Fluid Music said Somerset's network of music merchants operated stores in more than 20 countries. It also said it had revenues of about $85 million and earnings before interest, taxes, depreciation and amortization of about $15 million, but sources say that those numbers didn't include returns, while including write-offs for the proprietary interactive in-store displays.