Round Hill Music Royalty Fund has agreed to a takeover worth £375 million from private equity, which the company’s directors have backed after a tough time for the share price.
Based in Nashville but listed in London, the bulk of Round Hill’s catalogue is from before the year 2000, leaving much of it less likely to generate revenue for rights holders from airplay or streaming than newer tunes.
Nonetheless, there are some big stars alongside Armstrong on the books of the company. It has rights to a catalogue of tracks including early Beatles numbers, including I Saw You Standing There and some Rolling Stones songs. There are also tunes from The Supremes, Marvin Gaye and the timeless classic When a Man Loves a Woman by Calvin Lewis but made famous by Percy Sledge.
While streaming services mean access to old tunes is now easier, Round Hill Music conceded today that its business model has taken a hit from rising interest rates and inflation, which lift the costs of borrowing if it used to acquire assets, including classic pop hits.
Its board unanimously backed the deal.
The buyer is Concord Cadence, part of Alchemy Copyrights, which has been active in snapping up rights, spending over $2 billion since 2015 to become a major industry player.
Round Hill Music’s stock closed at $0.69 yesterday. Investors will receive $1.15 in cash for each share they own, valuing the deal at $469 million. It first listed in 2020 at $1 a share.
Robert Naylor, chairman, described the offer as “excellent value for shareholders.”
Bob Valentine, CEO of Concord said: “Round Hill Music has built an impressive portfolio of music rights which generate revenue across a variety of income streams and have demonstrated their ability to stand the test of time.
“As one of the world’s leading music companies with a proven track record of strategic catalogue expansion, Concord has a global team of sync, licensing, marketing, copyright and royalty experts well positioned to maximise the value of this portfolio.”