KKR, Bertelsmann Pay $168 Million For Chrysalis

Private equity firm Kohlberg Kravis Roberts & Co. and German media giant Bertelsmann will pay 107.4 million pounds ($168.8 million) for U.K.-based music publisher Chrysalis, Reuters reported. At 160 pence per share, the deal represents a 45.5% premium over the company’s closing price on October 29, the day before acquisition talks were announced.

(Reuters) – British music publisher Chrysalis has ended 43 years of independence by agreeing a sale to German rival Bertelsmann [BERT.UL] and private equity firm KKR for 107.4 million pounds ($168.8 million).

“Today’s deal marks the end of one era and the start of another for Chrysalis,” Chris Wright, co founder and chairman of the firm, whose catalogue includes Michael Jackson, David Bowie and Jennifer Lopez, said on Friday.

The joint venture, BMG Luxco, has agreed to pay 160 pence cash for each Chrysalis share, a premium of 45.5 percent to the firm’s share price on Oct. 29 — the day before it said it was in offer talks.

Shares in Chrysalis were down 0.2 percent at 158.5 pence at 1054 GMT.

Wright, who owns 28 percent of Chrysalis’ equity has been invited to join the supervisory board of BMG and become the non-executive UK chairman of BMG.

The Chrysalis label, set up by former university social secretaries Wright and Terry Ellis in 1967, started in West London as the Ellis-Wright Agency.

It changed its name a year later and entered its heyday in the 1980s when its recording arm boasted artistes ranging from Billy Idol to Blondie.

Wright bought out Ellis’ share in 1985 and sold Chrysalis Records to EMI six years later, retaining the publishing business and a catalogue of around 100,000 songs.

“The acquisition of Chrysalis represents an important step forward in our strategy as we build a major, global music rights business,” said BMG CEO Hartwig Masuch.

“Chrysalis’ extensive and high quality catalogue represents an excellent fit with our existing business.”

BMG has been on a catalogue buying spree this year, snapping up Cherry Lane Music Publishing, Evergreen Copyright Acquisitions and UK-based Stage Three Music.

In 2008, Chrysalis rejected an 104 million pound takeover bid from EMI.

($1=.6364 Pound)

(Reporting by Brenda Goh; editing by James Davey)