Imagem, one of the largest indie publishers with revenues of about 99 million euros ($125 million) in 2013, has been taken off the block after a failed auction process.
According to a statement from the company, a strategic review by its shareholders — which includes the Dutch pension fund known as APB — “has resulted in the decision to continue Imagem’s successful publishing activities.” The statement further said the strategy going forward will be to grow the current business further, including through new acquisitions.
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Imagem was founded in 2007 and built through acquisitions. First up, it acquired the European and/or U.K. catalogs of Rondor, Zomba, the BBC and 19 Music (for 125 million euros, or $190 million based on exchange rates at that time) from Universal Music Group, which agreed to sell those assets in order to receive regulatory approval of its BMG Music Publishing acquisition from Bertelsmann in 2006; it acquired Rodgers & Hammerstein in 2008 for $225 million; and in the same year paid 126 million pounds (then about $250 million).
Besides that $640 million, Imagam also made numerous organic pop signings including bringing aboard Mark Ronson; and bought Phil Collins‘ share of the Genesis catalog, which it administers, for an undisclosed price. Sources say if the pop catalog was sold, Collins had a buy-back option.
According to sources, the sellers were looking to realize 650 euros ($810 million) for the sale of the entire company through an auction run by Jeffries, the New York-based investment bank.
But when that auction process failed to produce a bid matching the sellers’ desired price, an auction for just the company’s pop catalog ensued. It was shopped to some of the bidders from the initial auction, including BMG Rights Management, Reservoir Media, Kobalt Music Group and Atlas Music Publishing, people familiar with the process tell Billboard.
In the end, BMG was the top bidder, and sources suggested it was going to pay about 140 million euros (about $175 million) for the pop catalog, which had a net publishing share (NPS), or gross profit, of about 11.5 million euros ($14.3 million).
But another knowledgeable source said BMG would never pay a 12-times multiple and suggested that BMG was also bidding on the two production music operations that Imagem owns, which combined have an NPS of 4 million euros ($5 million). In the end, whatever price BMG was willing to pay was not enough to satisfy the sellers, and talks reportedly broke off during the Thanksgiving weekend.
If it had sold the pop catalog, it would have been interesting to see what Imagem and the APB pension fund would do with the Rodgers & Hammerstein and Boosey & Hawkes catalogs. The former had a net publisher share of 18.1 million euros ($22.5 million) and was coveted by several parties, sources say, but even though Boosey & Hawkes had an even higher NPS of 19.4 million euros ($24 million), the number of strategic players that would be interested in the classical catalog is more limited.
So going forward, Imagem has a company that generated about 53 million euros ($66 million) in NPS, and 28 million euros ($35 million) in earnings before interest, taxes, depreciation and amortization.
“We are looking forward to this exciting new chapter in the Imagem story and expanding our position as the world’s number one independent music publisher,” Imagem group CEO André de Raaff said in a comment.