Hipgnosis pays £250 million for Kobalt catalogues

Hipgnosis pays £250 million for Kobalt catalogues

Hipgnosis Songs has acquired a portfolio of 42 catalogues from Kobalt Music Copyrights for $322.9 million (£250.2m).

The investment was funded with the net proceeds from Hipgnosis’ equity fundraising in September along with its existing leverage facility. Kobalt will continue to administer the catalogues.

It follows speculation about indie giant Kobalt’s plans to sell all or part of the company.

In total, the acquisition includes more 33,000 songs written by over 1,500 songwriters across a broad range of genres. Hipgnosis said it will generate a highly stable and predictable income stream, which grew by 6% to $18 million in 2019, as well as increase the company’s diversification.

Following the acquisition, the Hipgnosis Songs Fund Limited total portfolio comprises 117 catalogues and 57,000 Songs, with an aggregate acquisition value of £1.18bn.

The portfolio includes some of the most successful hit songs of the last 60 years, including Go Your Own Way and The Chain by Fleetwood Mac, All I Want For Christmas Is You and One Sweet Day featuring Boyz II Men by Mariah Carey, Bailando and Hero by Enrique Iglesias, Higher Love by Steve Winwood, Roar and Teenage Dream by Katy Perry, Gimme Some Lovin by The Spencer Davis Group, Can’t Find My Way Home by Blind Faith, Never Give Up on a Good Thing by George Benson, Bad to the Bone by George Thorogood, Halo by Beyoncé, Love Shack by the B-52s, In Da Club by 50 Cent, Sorry by Justin Bieber, Don’t You Worry Child by Swedish House Mafia, Hot In Herre by Nelly, Sugar by Maroon 5 and Let It Go by Demi Lovato from Disney’s Frozen Soundtrack.

As well catalogues by songwriters such as Lindsey Buckingham, Steve Winwood, 50 Cent, Nelly and Savan Kotecha, the deal includes 18,000 songs developed and acquired by Nettwerk’s publishing division over the past 30 years featuring the works Teenage Fanclub, Super Furry Animals and hitmaker Stefan Johnson (Dua Lipa, Halsey, Jason Derulo).

Merck Mercuriadis, founder of Hipgnosis Songs Fund Limited and The Family (Music) Limited, said: “Hipgnosis has had a special relationship with Kobalt Music since its inception so it’s only natural that we would eventually make a deal like this for Kobalt Capital’s inaugural fund. Willard, Johan and Laurent have curated a wonderful portfolio of proven songs that is incomparable with almost anything other than the Hipgnosis Songs catalogue which it complements beautifully. They are both small catalogues with songs of great cultural importance and an incredibly high degree of success within them from amongst the most important songwriters and artists in music’s rich history.”

Mercuriadis said he was “incredibly proud” of the songwriters who are now part of Hipgnosis following the deal.

“These special songs that have had such extraordinary success have a lot more joy to bring the world and we look forward to working with these phenomenal creators in taking their songs to new heights while protecting their legacies,” he said. “Thank you to Willard, Johan and Laurent and we look forward to working with Kobalt Music as our administrator on these important works.”

Willard Ahdritz, founder & chairman of Kobalt and chief investment officer of Kobalt Capital Limited, said: “When we started KCL in 2010, it was the world’s first regulated music royalties fund, offering clients our unique, transparent service and giving them comfort that we could provide a long-term commitment to administer their works if they wanted to sell their copyrights.

“Today, I am pleased to say that we have delivered on our promises to both our clients and our investors. The KCL advisory board has agreed to sell our first fund to Hipgnosis. The decision to sell to Merck and Hipgnosis was an easy one as we know them so well and the copyrights will be well taken care of under a long-term administration arrangement with Kobalt Music Group.” 

Laurent Hubert, CEO, Kobalt Music Group, said: “Since 2018, Hipgnosis has been a client and as Merck continues to grow his catalogue of songs, one thing will remain constant: Kobalt will continue to deliver best-in-class publishing admin services.”

Johan Ahlstrom, CEO, Kobalt Capital Limited, said: “We are pleased to sell this select portfolio to Hipgnosis and deliver our clients a great return on their investment in music. As the industry continues to grow, KCL will continue to be active in acquisitions and advise across our funds for our clients and investors.”

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