New Mountain Capital Acquires BMI for $1.7bn

BMI didn’t put a specific price on New Mountain Capital’s takeover in its confirmation last week, but sources have previously put the acquisition price in New Mountain Capital’s offer at around $1.7bn.

US radio giant iHeartMedia is lined up for a $100m windfall from the sale of BMI to a shareholder group led by New Mountain Capital.

On Monday (November 27), iHeart said that it expects, following the sale, to receive “approximately” $100m of proceeds “related to its equity interest in BMI, subject to approval of the transaction by BMI shareholders and customary regulatory approvals”.

The US broadcaster added that it plans to use the proceeds for “general corporate purposes, which may include the repayment of debt”.

Last week we learned that private equity firm New Mountain Capital (NMC) will “lead a shareholder group” to acquire a majority stake in BMI.

We’d known for some time that the private equity firm –  which has over $45bn in assets under management – had been in talks to acquire BMI, but the news was confirmed last Tuesday (November 21).

NMC’s ‘shareholder group’ also includes an arm of Google parent Alphabet, and as part of New Mountain’s investment, CapitalG – aka Google/Alphabet’s “independent growth fund” – will acquire a passive minority stake in the PRO.

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BMI also said in a press release last week that its current shareholders will allocate $100m  of the proceeds of the proposed saleto songwriter, composer and publisher affiliates “in recognition of [their] creativity” shortly after the transaction closes.

BMI says that the allocation of this $100m “will be in keeping with [BMI’s] distribution methodologies, which are based on performance levels over a set period of time”.

BMI added in the announcement that it “will work to finalize an equitable payout plan for this allocation in the coming months”.

The NMC transaction is subject to approval by BMI shareholders and customary regulatory approvals and is expected to close by the end of Q1 2024.

Mike O’Neill, BMI’s President & CEO, will continue to lead the company, along with his leadership team, following the closing.

“Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators,”  O’Neill said on Tuesday (November 21) when the news of the sale was announced.

Added O’Neill: “New Mountain is an ideal partner because they believe in our mission and understand that the key to success for our company lies in delivering value to our affiliates.

“We are excited about the many ways New Mountain will accelerate our growth plan, bringing new vision, technological expertise and an outstanding track record of strengthening businesses, all of which will help us build an even stronger future for BMI and our songwriters, composers and publishers.”

Source: Music Business Worldwide

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