New Mountain Capital to lead acquisition of BMI, affiliates to receive $100m payout

New Mountain Capital to lead acquisition of BMI, affiliates to receive $100m payout

New Mountain Capital will lead a shareholder group to acquire BMI.

The investment firm, which has more than $45 billion in assets under management, confirmed the move for BMI today. Terms were not disclosed.

Headquartered in New York, BMI is the largest performing rights organisation globally. It protects the rights of and advocates for more than 1.4 million songwriters, composers and music publishers

BMI licenses the performing rights in 22.4 million musical works to businesses.

Mike O’Neill, BMI’s president & CEO, will continue to lead the company, along with his leadership team, following the closing. BMI moved to a for-profit model last year.

New Mountain will acquire the company from the shareholders who own BMI today. The investment firm has also reserved additional capital to fund growth investments, new ventures and technology enhancements to help accelerate BMI’s long-term plan to maximise distributions for its members and improve the service it provides to songwriters, composers and publishers.

As part of the agreement, BMI’s current shareholders will allocate $100 million of the proceeds of the sale to affiliates shortly after the transaction closes. The decision was based on the “recognition of the creativity of the songwriters, composers and publishers they have had the privilege to represent,” according to a statement.

The allocation of those funds, while not a distribution of royalties, will be in keeping with the company’s distribution methodologies, which are based on performance levels over a set period of time. BMI will work to finalise an “equitable payout plan” for this allocation in the coming months.

“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,” said Mike O’Neill, BMI president & CEO. “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.” 

Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry

Mike O’Neill

He added: “I would also like to thank the BMI board of directors and BMI’s shareholders for their excellent stewardship and unwavering support of our creative community since the company’s founding in 1939.”

“BMI has been a trusted guide and champion of music creators from the beginning, and we are privileged to work with the company and its 1.4 million affiliates to build on that incredible legacy,” said Pete Masucci, managing director at New Mountain. “There are numerous growth opportunities ahead for BMI with significant potential to generate more value for the work of its songwriters, composers and publishers. We look forward to working together alongside Mike and his team to capitalise on those opportunities for the benefit of all BMI stakeholders.”

“While the music industry has undergone a technology-driven transformation over the past two decades, music infrastructure, including the performing rights ecosystem, has been slower to transform,” said Mike Oshinsky, director at New Mountain. “There is tremendous opportunity to modernise this critical part of music infrastructure and ensure that long term royalty collections for songwriters, composers and publishers continue to grow. With our support, BMI is ideally positioned to drive this transformation as the only PRO in the world to combine an open-door policy to all music creators with the innovation and commercial drive of a for-profit business.”

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


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