(Bloomberg) — Kobalt Music Group Ltd. has raised $550 million in debt financing for the acquisition of music copyrights, according to a person familiar with the deal, giving the closely held company funds to build its catalog.
JPMorgan Chase & Co. and HPS Investment Partners provided the funds, said the person, who asked not to be identified because the terms haven’t been announced. All three parties declined to comment.
A resurgence in listening, sparked in part by Spotify Technology SA’s streaming service, has boosted the value of song rights and led artists like Bob Dylan and Bruce Springsteen to sell their catalogs. That’s led to frenzied interest in libraries by major labels and institutional investors.
Swedish entrepreneur Willard Ahdritz founded Kobalt two decades ago to provide tools and services to songwriters. From that initial focus, the company grew it into one of the largest independent music businesses in the world. Kobalt runs a music publishing company, which works with songwriters, as well as AMRA, which collects royalties on behalf of rights holders.
The company on Monday reported its first ever annual profit, announcing earnings of $48.5 million before interest, taxes, depreciation and amortization, on $548 million in gross revenue for the year ended last June. Kobalt forecasts $65 million in earnings on that basis this year, with revenue of $625 million.
The company managed music copyrights for two funds that it sold for a combined take of about $1.4 billion last year. It also sold two divisions of its business to Sony Group for $430 million last year.
Kobalt works with 30,000 songwriters, including well-known artists like Stevie Nicks, the Foo Fighters and Paul McCartney.
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