Business

Hipgnosis Raises $215 Million With Stock Offering, Exceeding Target

Merck Mercuriadis
Joshua Blanchard/Getty Images for Billboard

Merck Mercuriadis attends the 2020 Billboard Power List Event at NeueHouse Hollywood on Jan. 23, 2020 in Los Angeles.

The Merck Mercuriadis-founded company spent $1.06 billion on the purchase of 84 song catalogs in the 12-month period ended March 31, 2021.

Hipgnosis Songs Fund Limited has raised £156 million ($215 million) through a proposed share sale on the London Stock Exchange, the company announced today (July 6). That exceeds the £150 million ($207 million) Hipgnosis targeted when it announced the share placing last month.

According to a press release, the funding round was oversubscribed due to “significant demand from existing and new investors.” As a result, 128,636,363 new ordinary shares have been placed at a price of £1.21 ($1.67) apiece, for a total of 1,211,076,631 ordinary shares in issue. They are expected to begin trading on the London Stock Exchange July 9.

"I am once again delighted with the support from both our existing and new shareholders with an oversubscribed raise of over $215 million, £156 million,” said Hipgnosis founder Merck Mercuriadis in a statement. “We will deploy this immediately into our pipeline of songs and I am incredibly appreciative of the incredible songwriters who have entrusted us with their iconic works. We will now have a portfolio of almost $2.5 billion of extraordinarily successful and culturally important songs, which offers a massive opportunity for us to add value with our Song Management which manages these songs with bandwidth and responsibility.”

As the company announced last month, Hipgnosis expects to use the proceeds from the placing to acquire catalogs already lined up by The Family (Music) Limited, the Mercuriadis-founded investment advisory firm that recommends purchases to Hipgnosis and uses what it calls "song management" to extract value on the back end. Mercuriadis previously announced that this latest round was investors’ last chance to buy into Hipgnosis for at least a year.

Prior to today’s announcement, Hipgnosis had raised a total of £1.1 billion ($1.5 billion) through a 2018 IPO and six subsequent raises, the most recent one in February 2021.

Hipgnosis, which is a member of the FTSE 250 Index, had revenue of $138.4 million in the year ended March 31, 2021, a 66% increase year-over-year, and earnings before interest, taxes, depreciation and amortization of $106.7 million, according to finalized financial figures the company released this week. During that 12-month period, the company spent $1.06 billion on the purchase of full or partial stakes in 84 music catalogs, including those of Neil Young, Barry Manilow, Shakira, Jimmy Iovine, Enrique Iglesias, Fleetwood Mac’s Lindsey Buckingham and Wu-Tang Clan member RZA. Its total portfolio now includes 138 catalogs encompassing 64,098 songs.