The lone U.S.-based Music Rights Organization that administers public performance, mechanical, synchronization and other rights has been picked up in a private transaction involving equity funds tied to $35 billion dollar investment giant Blackstone Group.
SESAC Holdings is being acquired by Blackstone from Rizvi Traverse Management.
The transaction is expected to close by the end of Q1 2017.
Financial details of the transaction were not disclosed.
SESAC’s 30,000 clients are diverse, and include songwriters and musicians include 2016 Nobel Peace Prize recipient Bob Dylan, Neil Diamond, Rush, Zac Brown, New Year’s Eve social media starlet Mariah Carey, and Robin Thicke.
SESAC 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. This follows the 2015 acquisition of the Harry Fox Agency.
SESAC Chairman/CEO John Josephson expressed excitement in its partnership with Blackstone. He commented, “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.”
He added that Blackstone is acquiring SESAC “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.”
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.
Blackstone Sr. Managing Director Robert Reid 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, added that Blackstone views SESAC “as an attractive fit for our core private equity investment platform” and is 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; 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 has had a somewhat rocky road with radio in recent years. In October 2012, the Radio Music License Committee brought antitrust charges against music licensing group SESAC, citing anticompetitive behavior. RMLC and Saga head Ed Christian called it an action of last resort.
It was not until July 2015 that a resolution was reached between RMLC and SESAC.
SESAC Holdings has offices in New York, Nashville, Los Angeles, Atlanta, Portland, San Francisco, London and Munich.