Blackstone has agreed to acquire SESAC Holdings, a music rights organization, from Rizvi Traverse Management. No financial terms were disclosed. Allen & Company LLC is providing financial advice to SESAC on the transaction while Moelis & Company LLC and AGM Partners LLC are doing likewise for Blackstone. And, Goldman Sachs is serving as financial adviser to Rizvi. The deal is expected to close before the end of the first quarter of this year.
NEW YORK–(BUSINESS WIRE)–Leading music rights organization SESAC Holdings (“SESAC” or the “Company”) announced today that private equity funds affiliated with Blackstone (NYSE:BX) have entered into an agreement to acquire the Company from Rizvi Traverse Management. This transaction is 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. Financial terms of the transaction were not disclosed.
SESAC is the only U.S.-based music rights organization that administers public performance, mechanical, synchronization and other rights all within a single company. SESAC is able to offer singular licenses for the works of its affiliated writers and publishers that aggregate both performance and mechanical rights in order to drive greater efficiency in licensing for music users, as well as enhanced value for music creators and publishers. 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.
SESAC operates a sophisticated information technology and data platform to provide timely, efficient royalty collection and distribution, automating many core business practices that allow for focusing greater attention on clients. 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. SESAC’s 30,000 affiliates include many of the most successful songwriters and musicians in the industry, including Bob Dylan, Neil Diamond, RUSH, Charli XCX (PRS), Zac Brown, Mumford & Sons (PRS), Lady Antebellum, Mariah Carey, Axl Rose, Shirley Caesar, and Robin Thicke.
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. 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.
The transaction is expected to close by the end of the first quarter of 2017.
SESAC Holdings is the only U.S.-based Music Rights Organization that administers public performance, mechanical, synchronization and other rights. SESAC Holdings is able to offer singular licenses for the works of its affiliated writers and publishers that aggregate both performance and mechanical rights in order to drive greater efficiency in licensing for music users, as well as enhanced value for music creators and publishers. Its businesses operate on a sophisticated information technology and data platform to provide timely, efficient royalty collection and distribution. SESAC’s subsidiaries are some of the most well-known companies in music licensing and administration. SESAC Performing Rights is the second oldest and most progressive performing rights organization in the U.S. SESAC‘s acquisition of The Harry Fox Agency (HFA) accelerated its transition to a “multi-rights” organization with HFA’s deep publisher relations and mechanical licensing history. SESAC Holdings has offices in New York, Nashville, Los Angeles, Atlanta, Portland, San Francisco, London and Munich.
Blackstone is one of the world’s leading investment firms. We seek to create positive economic impact and long-term value for our investors, the companies in which we invest, and the communities in which we work. We do this by using extraordinary people and flexible capital to help companies solve problems. Our asset management businesses, with over $360 billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available at www.blackstone.com. Follow Blackstone on Twitter @Blackstone.
About Rizvi Traverse Management
Rizvi Traverse Management is a private investment firm that specializes in investments in the media, entertainment and technology sectors. Past investments have included International Creative Management, Summit Entertainment, Playboy Enterprises, Facebook, Twitter, Snapchat, RealD, SpaceX and Square.