BMG Rights Management has made an agreement to acquire Cherry Lane Music Publishing.
The deal was confirmed by BMG Rights Management today (March 26). Billboard.biz first reported talk of a deal on Tuesday (March 23).
The Cherry Lane roster of clients includes Elvis Presley, John Denver, the Black Eyed Peas, Will.i.am, John Legend, Quincy Jones, Warren Haynes, Jordin Sparks, Ashford & Simpson and Hans Zimmer.
It is the biggest acquisition by the 18-month old BMG Rights Management so far, as well as giving the German company a major presence in the U.S. It launched stateside in December 2009 with offices in New York, Los Angeles and Nashville, following the July 2009 acquisition of Crosstown Songs America.
BMG Rights Management was launched October 2008 by Hartwig Masuch, former BMG Music Publishing Germany CEO, shortly after Bertelsmann sold its 50% stake in the Sony BMG joint venture to Sony. Universal Music Group agreed to acquire BMG Music Publishing in 2006, which enabled Bertelsmann to clear debt.
“Having already established itself once as a leader in the music publishing industry over several decades, BMG, via its partnership with KKR, has quickly begun to take on a leadership position again on a global basis,” said Peter Primont, Cherry Lane’s CEO and a major shareholder, in a statement. “We are excited to be part of the team that will continue to grow the business at this important juncture in music publishing’s evolution.”
BMG’s CEO Hartwig Masuch added: “We chose to acquire Cherry Lane given its highly-regarded, service-oriented approach with its artist/songwriter clients, its extensive catalog of legendary songs, and its breadth of relationships within the music, television, and filmed entertainment communities.”
Terms have not been disclosed, although the Financial Times identified a price of between $85 million and $100 million in a report today (March 26). It said that Cherry Lane, which is celebrating its 50th year in 2010, may have favored the German company as it was more likely to keep most of the 70 staff.
There was interest in Cherry Lane from other music publishers and private equity firms in mid-2008, when it launched a strategic review. But Cherry Lane put the review on hold amid the sudden global financial turmoil.
BMG Rights Management, a Berlin-based joint venture between Bertelsmann and private equity firm KKR (it came on board as a JV partner in July 2009), has also been linked to EMI’s music publishing assets. Earlier this week Thomas Rabe, Bertelsmann’s CFO, told Billboard.biz during a press conference that it would look at EMI if it goes on the market.
“The strategy of BMG Rights Management is based on organic growth as well as on acquisition growth,” said Rabe at the press conference. “Since the start, we have done over 100 signings and acquisitions and are on a good path. We have also bought middle-sized publishing companies. There will be more.”
“This acquisition validates the growth story that we set out to build when we launched the innovative BMG partnership with Bertelsmann last year, combining KKR’s capital with BMG management expertise” said KKR director Philipp Freise today.
BMG Rights Management recently signed a global publishing deal with Leona Lewis. Prior to the Cherry Lane deal, it represented the rights to more than 75,000 compositions including hits recorded by Kelly Clarkson, Christina Aguilera and Britney Spears.