Hipgnosis Songs Fund Ltd. continues its acquisition binge by acquiring the Kobalt Music Copyrights Fund 1, which includes the song catalogs of such writers as Lindsey Buckingham, Steve Winwood, the B52’s, 50 Cent, George Benson, Bonnie McKee, Nelly and Skrillex, among others.
In total, the 42 catalogs comprise over 33,000 songs written by over 1,500 songwriters. Hipgnosis Songs says it is paying $323 million and funding the acquisition through a combination of equity and borrowings from its recently expanded revolving credit facility. Moreover, it says the net publishers’ share (NPS) grew 6% to $18 million in 2019, which it says translates into an 18.3 times NPS multiple.
Over the summer Hipgnosis Songs, which is listed on the London Stock Exchange, raised some £420 million in two equity tranches, first raising £236.2 million ($293.4 million) in July and another £190 million ($245.4 million) on Sept. 21, as well as expanding the capacity-and changing the currency— of its revolver from £150 million to $400 million.
The catalog contains such songs as “Go Your Own Way” and “The Chain” by Fleetwood Mac, “All I Want For Christmas Is You” and “One Sweet Day” featuring Boyz II Men by Mariah Carey, “Bailando” and “Hero” by Enrique Iglesias, “Higher Love” by Steve Winwood, “Roar” and “Teenage Dream” by Katy Perry, “Gimme Some Lovin’” by The Spencer Davis Group, “Can’t Find My Way Home” by Blind Faith, “Never Give Up on a Good Thing” by George Benson, “Bad to the Bone” by George Thorogood, “Halo” by Beyoncé, “Love Shack” by the B-52s, “In Da Club” by 50 Cent, “Sorry” by Justin Bieber, “Don’t You Worry Child” by Swedish House Mafia, “Hot In Herre” by Nelly, “Sugar” by Maroon 5 and “Let It Go” by Demi Lovato from Disney’s Frozen Soundtrack.
Moreover, the catalog includes the songs of such songwriters as Walter Afanasieff, Savan Kotecha, Enrique Iglesias, Christina Perri, Evan Bogart, J-Kash, Dierks Bentley, LunchMoney Lewis, Eman Kyriakou, John Simon Neil / Biffy Clyro, Lateral, Mac Powell / Third Day, Mark Batson, David Gray, Tim James and Antonina Armato / Rock Mafia, and Stefan Johnson. Finally, it also includes the publishing catalog of Canadian music company Nettwerk, which with 18,000 songs, makes up more than half of the acquired Kobalt catalog.
In a statement, Hipgnosis Songs Fund Ltd. founder Merck Mercuriadis labeled the acquired song catalogs as a “wonderful portfolio of proven songs.” He added, “They are both small catalogues with songs of great cultural importance and an incredibly high degree of success within them from amongst the most important songwriters and artists in music’s rich history…we look forward to working with these phenomenal creators in taking their songs to new heights while protecting their legacies.”
Already this year, Hipgnosis Songs Fund has acquired the Big Deal music publishing company and its catalog; the catalog of Tom DeLong of Blink-182; writer and producer Emile Hayne, Ammar Malik, songwriter and producer Brian Higgins, Richie Sambora, Mark Ronson, RedOne, Rodney Jerkins, Barry Manilow, Debbie Harry and Chris Stein, Rza, Nikki Six, Ernest Dion Wilso, AKA No I.D., Chrissie Hynde, and L.A. Reid. Yet, buying the Kobalt catalog marks the biggest Hipgnosis Songs Fund acquisition to date.
With the Kobalt acquisition that brings Hipgnosis Songs portfolio to 117 catalogs with 57,000 songs, with an acquisition value of £1.18 billion ($1.5 billion), according to the company. The Mercuriadis-founded The Family (Music) Limited serves as investment advisor to Hipgnosis Songs Fund Ltd.
Kobalt issued a comment on the sale of its catalog. “When we started KCL in 2010, it was the world’s first regulated music royalties fund, offering clients our unique, transparent service and giving them comfort that we could provide a long-term commitment to administer their works if they wanted to sell their copyrights,” Kobalt founder and chairman and Kobalt Capital chief investment officer Willard Ahdritz said in a statement. “Today, I am pleased to say that we have delivered on our promises to both our clients and our investors.”
According to the Hipgnosis announcement, Kobalt will continue to serve as administrator of the acquired catalog. In fact, Kobalt Music Group CEO Laurent Hubert said in a statement, “Since 2018, Hipgnosis has been a client and as Merck continues to grow his catalogue of songs, one thing will remain constant: Kobalt will continue to deliver best-in-class publishing admin services.”
Finally, Johan Ahlstrom, CEO of Kobalt Capital Ltd, the advisor to Kobalt Music Copyrights , said in a statement, “As the industry continues to grow, [Kobalt Capital Ltd.] will continue to be active in acquisitions and advise across our funds for our clients and investors.”
Kobalt Capital still manages Kobalt Music Copyrights Fund II, which includes the SONGS acquisition it made in 2017 that includes such songs as Lorde’s “Royals,” The Weeknd’s “Can’t Feel My Face,” “The Hills,” and “Starboy,” Major Lazer’s “Lean On,” and Desiigner’s “Panda.”