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KKR SELLS 60K SONG CATALOG TO UMG, DUNDEE

After enlisting Raine Group late last year to evaluate options for its music assets, private equity group KKR has sold its majority stake in Chord Music Partners to Universal Music Group and Dundee Partners.

KKR formed Chord in 2021 in tandem with Dundee, the investment office of the Hendel family. Its portfolio includes more than 60,000 works from the likes of The Weeknd, Ryan Tedder/OneRepublic, David Guetta, Lorde, Kid Cudi, Diplo, Jimmy Jam and Terry Lewis, Ellie Goulding, ZZ Top and John Legend, among many others. That block of material was purchased for $1.1b in October 2021.

UMG is acquiring a 25.8% interest in Chord for $240m in a deal valuing the latter at $1.85b, while Dundee will now own 74.2% of the company. UMG and Dundee will also aim to acquire additional catalogs via Chord, music publishing rights for which will be administered through Universal Music Publishing Group. Recorded music rights will be handled by Virgin Music Group.

"Finding partners who share our passion for identifying iconic songs and recordings that will stand the test of time and deliver long-term growth is essential, which is why we're so pleased to be working with Stephen and Sam Hendel and Dundee Partners," said UMG Chairman and CEO Sir Lucian Grainge. "With the leadership of Jody Gerson at UMPG, Nat Pastor and JT Myers at Virgin, and the support of our experienced creative executives around the world, no one can do more with music rights than our teams. We look forward to creating maximum commercial and creative value for the songwriters and artists in Chord and building for the future."

"By combining a best-in-class financial acquisition vehicle with the world’s leading music company, we are creating both a premier platform for music investment as well as a permanent home for premier artist’s legacies and their iconic cultural works," added Dundee Partners' Managing Principal and Chord co-founder Sam Hendel.

UMG EVP/CFO and President of Operations Boyd Muir credited KKR and Dundee for building "a very high-quality catalog that will benefit from our first-rate management and global capabilities," and said the new structure will provide the company "with an efficient vehicle for future catalog acquisitions, without significant capital allocation through a combination of leverage and partner equity capital. And finally, it offers us the perfect partner to approach future growth opportunistically and flexibly—one who is equally bullish on the long-term prospects for music."

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