Kobalt Music Sells Controlling Interest to Francisco Partners

·3-min read

As expected, Kobalt, one of the world’s biggest independent publishers and music-services companies, has sold a controlling interest to investment firm Francisco Partners.

Music Business Worldwide reports that Francisco acquired a 90% stake in the company for $750 million, although a rep for Kobalt did not confirm those numbers. Bloomberg first reported that the two companies were in talks, with a similar price range, late last month.

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The company Music and Dundee Partners are also investing in Kobalt; Music CEO Matt Pincus will join the Kobalt’s board after the deal closes. The investment is subject to customary regulatory and closing conditions. Further terms of the deal were not disclosed.

Kobalt’s publishing roster includes Paul McCartney, Max Martin, Chidlish Gambino, Finneas, Drake producer Noah “40” Shebib, Trent Reznor, Karol G, Foo Fighters, Beck and many more.

Willard Ahdritz will continue as Kobalt’s chairman, and the company will continue to be led by its existing management team of CEO Laurent Hubert, president/COO Jeannette Perez, CFO Catrin Drabble and CTO Nuno Guerreiro.

The company has been on a sales spree in recent years. Its investment management division, Kobalt Capital, oversaw the sale of two music funds for a total of $1.4 billion (one to Hipgnosis Songs Fund for $323 million and another to KKR and the Hendel family for $1.1 billion), and last year Sony Music acquired Kobalt’s AWAL recorded-music business and Kobalt Neighbouring Rights for $430 million. It also retained advisors to sell the main company in 2020.

Founded by Ahdritz in 2000 as “an alternative to the traditional music business model,” Kobalt shook up the industry with its emphasis on transparency in an area of the business that was notoriously opaque, and there is no question that it has changed publishing in any number of ways.

Ahdritz said, “For over 20 years, Kobalt has been a music leader with technology as a core part of our focus, and I can’t think of a better investor than Francisco Partners to back our vision and invest deeply in our ambitious technology development and creator services. Having known the team at Francisco Partners for two years, I am excited to invite them into the Kobalt family. I look forward to working with them as Kobalt Chairman. This backing is a testament to what we’ve built at Kobalt, and we will continue working to improve the industry for our clients. I would also like to make a special point to thank all those who believed in Kobalt from the start: investors, clients, and employees, who all contributed to building this great company, thereby changing the game for creators.”

“Our investment should help bring more resources, experience, and alignment to continue to build Kobalt as a premier destination for creators, further grow AMRA as the only global digital licensing platform, and support and invest in technology innovation across the entire Kobalt ecosystem to address the needs of creators and publishers,” said Matt Spetzler, Partner at Francisco Partners.

Goldman Sachs & Co. LLC served as financial advisor to Kobalt, and Raine Group served as financial advisor to Francisco Partners.

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