Universal Music Group (UMG), the world’s largest music company, has acquired a 25.8% interest in Chord Music Partners for $240 million. As part of the deal, UMG will now handle distribution and publishing administration for Chord’s existing catalog, provided by UMG’s Virgin Music Group and Universal Music Publishing Group (UMPG), respectively.
Formed in 2021 by KKR and Dundee Partners, the investment office of the Hendel family, Chord owns over 60,000 copyrights. This includes stakes in top songs like “Dreams” and “Landslide” by Fleetwood Mac, “La Grange” by ZZ Top, “Counting Stars” and “Apologize” by OneRepublic, “Redbone” by Childish Gambino, “I Like Me Better” by Lauv, “Pursuit of Happiness” by Kid Cudi, “All Of Me” by John Legend, “Girls Like You” and “Sugar” by Maroon 5, “Halo” by Beyonce and “A Thousand Years” by Christina Perri.
Following the completion of the transaction, KKR will exit Chord. Previously, it was the majority stakeholder in the catalog firm. Now, Dundee is increasing its share to 74.2% and UMG will hold the remaining minority share.
UMG was advised by Goldman Sachs, Kirkland & Ellis LLP and Freshfields. DLA Piper and Axinn, Veltrop & Harkrider LLP served as legal advisors to Dundee. Fifth Third Bank, National Association served as financial advisor and provided committed financing to Dundee and UMG. The Raine Group served as the exclusive financial advisor and Manatt, Phelps and Phillips, LLP served as legal advisor to Chord Music Partners. Latham & Watkins LLP served as legal counsel to KKR.
Lucian Grainge, chairman/CEO of UMG, said in a statement: “Finding partners who share our passion for identifying iconic songs and recordings that will stand the test of time and deliver long-term growth is essential, which is why we’re so pleased to be working with Stephen and Sam Hendel and Dundee Partners. With the leadership of Jody Gerson at UMPG, Nat Pastor and JT Myers at Virgin, and the support of our experienced creative executives around the world, no one can do more with music rights than our teams. We look forward to creating maximum commercial and creative value for the songwriters and artists in Chord and building for the future.”
Boyd Muir, UMG executive vp/CFO/president of operations added: “We’re excited to partner with the Hendel family in Chord for a number of reasons. First, KKR and Dundee have built a very high-quality catalog that will benefit from our first-rate management and global capabilities. Second, this new structure provides us with an efficient vehicle for future catalog acquisitions, without significant capital allocation through a combination of leverage and partner equity capital. And finally, it offers us the perfect partner to approach future growth opportunistically and flexibly, one who is equally bullish on the long-term prospects for music.”
Sam Hendel, Dundee Partners’ managing principal/co-founder of Chord, added: “We’re thrilled to be partnering with Universal Music Group and embarking on this next exciting chapter for Chord. By combining a best-in-class financial acquisition vehicle with the world’s leading music company, we are creating both a premier platform for music investment as well as a permanent home for premier artists’ legacies and their iconic cultural works. We’d like to thank the team at KKR for their partnership and creating a strong foundation for Chord and its future success.”
“We are grateful to have had the opportunity to collaborate with many leading artists and to create significant value for our investors by building Chord into a differentiated and scaled portfolio,” said Jenny Box, partner at KKR. “We believe that Dundee and UMG will drive further value creation for artists and that they share our commitment to being respectful stewards of artists’ music.”
