Bug Music Secures $200m Credit Facility

Bug Music Inc., a Los Angeles-based music publisher sponsored by Spectrum Equity Investors, has secured a $200 million credit facility led by JPMorgan. It can be increased to $250 million, and is priced at Libor plus 2.5 percent.



Bug Music, Inc., one of the world’s largest independent music publishers, has secured a new $200,000,000 credit facility, which can be increased to $250,000,000. The facility, priced at the London interbank offered rate (Libor) plus 2.50%, was led by investment bank JP Morgan, it was announced today by Bug Music CEO John Rudolph.

“Our sound business fundamentals and practices continue to be rewarded as reflected by the facility size and attractive rate, in spite of a very difficult credit market. The significant upsizing of our credit facility will enable Bug Music to continue to have the financial resources to pursue acquisition opportunities and will enable us to continue to grow the company effectively,” stated Rudolph.

Rudolph added, “Jason Somerville and the JP Morgan’s team in the Entertainment Industries Group are a great partner and have again demonstrated their ability to deliver. In the past two years, our competitors were often overly aggressive in their M&A activities whereas we were viewed as conservative. Now this discipline is paying off and is evidenced by JP Morgan and eight other sponsor banks joining the facility. Bug Music is a rapidly growing, highly profitable publisher with great prospects for continued growth.”

Thomas McGrath, Bug Music’s Chairman, noted, “Bug Music continues to show “best in class” management and profitable growth through its M&A activity and its creative collaborations with its valued writers. With a music library of more than 250,000 copyrights, and offices now in seven cities across the US and Europe, Bug Music has emerged as the largest, most important independent music publisher dedicated to building a business for the long-term. We are excited to be a part of this great growth story in music publishing and look forward to continuing our long-term partnership.”

Bug Music’s recent activity has begun to redefine the nature of the traditional publishing company, by creating unique and innovative deals that allow for more creative collaboration beyond administration. The company’s most recent deals have included the signing of Kara DioGuardi, American Idol’s newest judge and one of the industry’s hottest and most sought-after songwriter and producer; the acquisition of DioGuardi’s vast catalog of hits by such artists as Christina Aguilera, Jonas Brothers, and Celine Dion; an equity stake and partnership agreement with Arthouse Entertainment; the acquisition of music production leader Selectracks; and the acquisition of Iggy Pop’s catalog.

About Bug Music

Over the last two years, Bug Music through key strategic acquisitions, the creation of new business models and enhanced operational performance, has become the largest independent, full-service music publisher in the world. More than 33 years after its founding, the company’s passion for music and its exceptional commitment to serving its writers and partners still drives Bug Music and its employees to continually strive for professional excellence. The company serves the world’s music markets through wholly-owned and fully-staffed offices in Los Angeles, Nashville, New York, Atlanta, Baltimore, London and Munich.

Since the new investors and management team came on board in 2006, Bug Music has experienced dynamic growth. In 2007, Bug Music acquired the renowned Windswept Music and Trio/Quartet catalog solidifying its position as one of the premier music publishers in the world. Boasting over 250,000 copyrights including such classics as “What a Wonderful World,” “Fever,” and “Happy Together,” as well as hit songs from such musical luminaries as Johnny Cash, Pete Townshend, Willie Dixon, Muddy Waters, Woody Guthrie, Townes Van Zandt and Stevie Ray Vaughan to contemporary hitmakers Three Six Mafia, Ashley Gorley (Carrie Underwood, Trace Atkins), Kara DioGuardi, Iggy Pop, Ryan Adams, Kings of Leon and Wilco, Bug Music’s reputation as a writer-oriented publisher and trusted counsel of legendary estates and current artists is unrivaled. For more information, please visit www.bugmusic.com and www.selectracks.com.

Bug Music is controlled by its senior management and Crossroads Media, a partnership between Thomas McGrath and Spectrum Equity Investors.

About Crossroads Media

Crossroads Media is a Los Angeles-based strategic partnership between Spectrum Equity Investors and Mr. Thomas McGrath. Mr. McGrath is the former President of Paramount Enterprises, a role in which he had responsibilities for many activities of that division, including: Famous Music (music publishing), Paramount Parks (theme parks), Famous Players (movie theaters), and Viacom Consumer Products, encompassing licensing, merchandising, themed entertainment, and theatrical production. In addition to serving as President of Paramount Enterprises, Mr. McGrath also served as Chief Operating Officer of Viacom Entertainment Group, which included Paramount Pictures and Paramount Television.

About Spectrum Equity Investors

Founded in 1994, Spectrum Equity Investors is a leading private equity firm specializing in investments in profitable, growing service businesses throughout North America and Western Europe. With offices in Boston and Menlo Park, Spectrum currently manages over $4 billion in capital. Representative media and entertainment portfolio companies include AMC Entertainment, Apprise Media, Bug Music, Classic Media/Entertainment Rights (LSE: ERT), Eutelsat S.A., and Patriot Media and Communications (acquired by Comcast). For more information, please visit www.spectrumequity.com.