NO FOOLIN': CHRYSALIS MAKES MAJOR ACQUISITION

Chrysalis, which a year ago was considering the possibility of a sale, has morphed back to its familiar aggressive state, snagging a significant prize in acquiring First State Media Group. What the British indie has picked up is an international music publishing business with operations in seven countries under the S1 Songs and State One Music nameplates.

FSMG controls over 45k copyrights comprising, among others, the catalog of Sheryl Crow (including “If It Makes You Happy,” “All I Wanna Do” and “Everyday Is a Winding Road”), the former DreamWorks catalog (including John Denver’s “Leaving on a Jet Plane” and Take Me Home Country Roads, the Trammps’ “Disco Inferno,” the Jefferson Airplane’s “Somebody to Love” and the Carpenters’ “ Superstar”) and the Wind-up catalog (including Evanescence’s “Bring Me to Life” and Finger Eleven’s “Paralyzer”).

As a result of the transaction, Chrysalis will manage music copyright assets worth in excess of $155 million on behalf of FS Media Works Fund 1—a partnership of international institutional investors and pension funds. This positions the company as a significant partner to investors that have a strong appetite for investing in music copyright assets that generate stable cash flow, according to the press release.

Said CEO Jeremy Lascelles: “We have been looking at a number of catalogs in recent months, and it is great to secure a portfolio containing so many classic songs from the past 50 years, including some of my all-time personal favorites. I'm thrilled at the prospect of managing these songs under the Chrysalis banner and of seizing opportunities to use them across a wide range of platforms."

Added Chairman Chris Wright: “It’s also very significant that we now have access to a new group of investors to partner with in executing our strategy. The long-term investment horizon of these institutions and pension funds is extremely well suited to music publishing assets, which have a long-term life, and we look forward to developing a close long-term relationship with them.”

FSMG was acquired for £11 million ($16.5 million), payable in cash on completion from First State Media Holdings, a subsidiary of Commonwealth Bank of Australia, as well as Dream Theatre Ireland and Dream Theatre Ireland No.2, the latter two entities associated with the management of FSMG. The acquisition is being fully funded from Chrysalis’ existing facilities, under which it retains a further £22.4 million for future acquisitions.

As of last June 30, the date of the last audited financial statements, FSMG had gross assets of £13.2 million and a normalized loss for the year of £.3 million. Chrysalis’ existing international operations will result in significant synergies, including a wider exploitation of the copyrights and a reduction in the overall cost base, generating substantial operating cash flows, gross income and NPS, the announcement pointed out.