MAMA Group has acquired a 20% stake in the Nettwerk Music Group, the Canada-based record label, artist management and publishing business.
MAMA claim the investment will create the world's largest management collective, with a combined roster of more than 90 artists and 80 producers.
London-based MAMA has paid $6 million, in a mixture of cash and shares, for the 20% stake in the privately owned company. A further $8 million will be paid in cash and shares, depending on profit targets being achieved over the next two years.
"We believe that this alliance creates one of the most exciting opportunities in the music industry -- not by creating the biggest music business, but by combining our skills and assets to become the best," say Adam Driscoll and Dean James, co-CEOs of MAMA Group, in a statement. "We expect this investment to be revenue enhancing for MAMA in our 2008/09 fiscal year and believe that there are significant opportunities for this partnership to generate substantial additional value for MAMA in the coming years."
Nettwerk's management roster includes Canadian acts Avril Lavigne, Barenaked Ladies and Sarah McLachlan, who also releases her albums on the company's record label. MAMA's existing management division includes SuperVision Management, which represents Kaiser Chiefs, Franz Ferdinand and the Cribs.
Nettwerk's management arm also has companies in the U.K. and U.S. and represents international artists such as Stereophonics and Gogol Bordello.
A MAMA company statement adds that the combination of MAMA and Nettwerk managed touring artists is expected to have a "significant positive impact" on the revenues generated by MAMA's 19 U.K. venues.
"The Company [MAMA] believes that the music industry is seeking to migrate its business model from a series of stand-alone vertical businesses (recording, publishing, live, management and merchandising) into a more horizontally integrated business that puts the artist at the heart of those integrated activities," adds the company's statement.
MAMA Group has taken a stake in all 11 key music subsidiaries owned by the Nettwerk Music Group, covering management, record labels and publishing in the U.S., U.K. and Canada.
Nettwerk was founded in 1984 by Terry McBride, Mark Jowett and Ric Arboit, with Dan Fraser joining in 1998. The company has offices in Vancouver, New York, Los Angeles, London, Boston, Nashville and Hamburg.