SESAC Acquired by Investment Giant
The Blackstone Group
By Tim Ingham
Music Business Worldwide
Fast-growing US collection and licensing society SESAC has been acquired by private equity funds affiliated with the $35bn-valued Blackstone Group.
Blackstone, which has over $360bn in assets under management, has entered into an agreement to acquire SESAC Holdings from Rizvi Traverse Management.
The transaction is expected to close by the end of the first quarter of 2017. Financial details of the transaction were not disclosed.
SESAC, which acquired the Harry Fox Agency (HFA) in 2015, claims to be the only US-based music rights organization that administers public performance, mechanical, synchronization and other rights all within a single company.
It says that its growing sound recording-matched composition database makes it ‘the primary source for real-time record release and publishing data as well as the de facto database of record for the U.S. publishing industry’.
The company’s 30,000 clients include songwriters and musicians such as Bob Dylan, Neil Diamond, RUSH, Charli XCX (PRS), Zac Brown, Mumford & Sons (PRS), Lady Antebellum, Mariah Carey, Axl Rose, Shirley Caesar, and Robin Thicke.
It recently expanded its activities to include the international market through MINT – a joint venture with Swiss collection society SUISA, that will license and administer music rights to digital music platforms on a pan-European basis.
SESAC Chairman and CEO John Josephson said, “We are excited to partner with Blackstone. The long-term investment horizon of their core private equity platform was especially attractive to us as we seek to execute our company’s growth strategy in our primary performance rights business, as well as mechanical rights, administrative services, multi-rights and multi-territory licensing.
“Blackstone is acquiring our company with the specific intent of backing the existing management team, and shares our long-term vision for the company with a history of adding value to their portfolio companies as a supportive strategic partner and capital provider.
“We anticipate a seamless transition in ownership with no disruption to our business activities as a result of this transaction.”
The transaction is said to be Blackstone’s first investment as part of its core private equity strategy, which is ‘specifically designed to hold private equity investments for much longer periods of time than traditional private equity funds’.
“Going forward, we believe our long-term partnership with Blackstone will position SESAC well for enhanced growth and continued delivery of best in class service to our affiliates, licensees and commercial partners.” Josephson added.
“We would also like to thank Ben Kohn and his partners and colleagues at Rizvi for their strong support of SESAC during its ownership of the company over the last four years, and key role in building the business alongside the management team.”
Robert Reid, Senior Managing Director at Blackstone, said, “We are thrilled to be backing John, Kelli Turner and the entire SESAC team and investing in the most progressive music rights organization for songwriters and artists. Music is fundamental to our society and is consumed both actively and passively by users worldwide, across increasingly diverse methods of distribution.
“We expect music listenership to continue to grow over the long-term and are excited to invest in SESAC, one of the key facilitators of the music market and related copyright management infrastructure.”
David Kestnbaum, Managing Director at Blackstone said, “We view SESAC as an attractive fit for our core private equity investment platform and are pleased to partner with the company’s experienced, highly capable management team to help support their growth strategy over the long term to continue to serve their key affiliate and licensee constituents.”
Allen & Company LLC is acting as financial advisor to SESAC with respect to the transaction and Akin Gump Strauss Hauer & Feld LLP is acting as SESAC’s legal counsel. Moelis & Company LLC and AGM Partners LLC are acting as financial advisors to Blackstone with respect to the transaction, and Kirkland & Ellis LLP is acting as Blackstone’s legal counsel.
Goldman Sachs is acting as financial advisor to Rizvi with respect to the transaction. Jefferies is providing debt financing related to the transaction.
SESAC Holdings has offices in New York, Nashville, Los Angeles, Atlanta, Portland, San Francisco, London and Munich - MBW