Rizvi Traverse Management is the new majority owner of the Society of European Stage Authors and Composers (SESAC), according to press reports.
A Wall Street Journal reports says the private equity firm paid $600 million for a 75% majority stake in SESAC. It's unclear if all of the previous owners -- the investment group of Stephen Swid, Allen & Co. Freddie Gershon and Ira Smith -- retain an interest in the remaining 25% stake, or if some of the completely sold out.
SESAC -- which represents such songwriters Bob Dylan, Neil Diamond, Rush and Robert Johnson for performance rights licensing and collections -- and Rizva were unavailable for comment at deadline.
Most reports suggest that Rizvi Traverse paid $600 million for the 75% stake, but music industry and Wall Street financial executives wonder if that is accurate. That price for that percentage stake suggests that SESAC carried an $800 million valuation in the deal.
Since SESAC reported $42 million in EBITDA on revenues of $128 million, sources say, that suggests that Rizvi Traverse paid an "insane" 19 times EBITDA multiple for the company, as one Wall Street executive put it. Much more likely, those financial executives say, is that the $600 million figure cited is the deal's full valuation, which would suggest that Rizvi Traverse paid $450 million for the 75% stake, or a 14.3 multiple, which those executives still consider an expensive deal.