Universal Music Group Targets 2022 for IPO

Universal Music Group logo.
Courtesy of UMG

Universal Music Group logo.

Universal Music Group plans to have an initial public stock offering in 2022, parent company Vivendi announced Tuesday in its third quarter earnings release. Previously, the company had publicly said the IPO would occur no later than 2023.

The IPO will happen in 2022 because of positive trends in operations, the market potential and discussions between UMG and its partners, Vivendi CFO Hervé Philippe said during Tuesday’s earnings call. After a pandemic-related, second-quarter downturn, UMG’s revenues grew 6.1% at constant currency -- without incorporating changes in currency exchange rates -- and 3.0% as reported.

Wall Street turned bullish on music after streaming revenue growth has given record labels five consecutive years of growth. Warner Music Group launched a successful IPO in May, which allowed parent company Access Industries to cash out about $1.7 billion. Publishing company Hipgnosis Songs has raised over $1 billion on the London Stock Exchange and direct investments over the last two years. Another publisher, Round Hill Music, is planning for an IPO in London.

Much could change over the next two years, but Tencent’s investment in UMG sets a precedent for the IPO: a €3 billion investment for 10% of the company valued UMG at €30 billion ($35.5 billion), or 33 times earnings before interest, taxes, depreciation and amortization.