Mubadala to sell EMI Music Publishing to Sony for $4.75bn

July 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

July 2018 Issue

In a deal which represents a “milestone” for both the company and its private equity business, Mubadala Investment Company is to sell its consortium’s majority interest in EMI Music Publishing to Sony Corporation for $4.75bn.

A leading manufacturer of audio, video, game, communications, key device and information technology products for the consumer and professional markets, Sony’s acquisition of EMI Music Publishing – which owns or administers over two million songs that include classics by Queen and Carole King, along with contemporary songs from Kanye West, Alicia Keys, Drake, Sam Smith, Pink, Pharrell Williams and Calvin Harris – represents a commitment to writers and artists as well as to the music business more broadly.

“We are thrilled to bring EMI Music Publishing fully into the Sony family and maintain our number one position in the music publishing industry,” said Kenichiro Yoshida, president and chief executive of Sony Corporation. “I would also like to convey my gratitude to Mubadala and Mubadala Capital, our equity partner in EMI Music Publishing, for sharing our long-term perspective on the potential success of music publishing and their support as we grew the business.”

Established in 2011 as the financial investment arm of Mubadala, Mubadala Capital operates six integrated businesses focused on various asset classes and geographies that include private equity, public equities, credit, venture, sovereign investment partnerships and Brazil. The group invests globally across the capital structure in both public and private securities, whether directly or through third-party managed funds.

Over the past six years, Mubadala Capital and Sony have worked together to create value alongside Sony/ATV, Sony’s music publishing arm. Sony/ATV has been administering the EMI Music Publishing catalogue’s legacy of iconic writers and artists, and along with the consortium reinvesting in existing writer relationships and growing the catalogue by signing new writers on a 50/50 basis. This partnership, alongside the global rise of streaming and paid streaming services, has led to an appreciation in value of the EMI Music Publishing catalogue, as millions of new consumers have been provided access to innovative distribution channels.

“EMI Music Publishing represents one of the world’s largest and most diverse catalogue of copyrights with iconic songs that span every decade over the last one hundred years,” said Adib Mattar, head of private equity at Mubadala Capital and chairman of EMI Music Publishing. “Writers and artists only stand to benefit under consolidated ownership and should feel proud to be part of the Sony family. The sale of our consortium’s interest in EMI represents a milestone for Mubadala and our private equity business.”

The original transaction and investor consortium that partnered with Sony and the Michael Jackson Estate to acquire EMI Music Publishing from a wholly-owned subsidiary of Citigroup Inc. was sourced and assembled by Mubadala Capital’s private equity business, which has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012.

“EMI Music Publishing has been a successful investment for Mubadala and I would like to personally extend my appreciation to the leadership at Sony and Sony/ATV, who have been instrumental in administering the EMI Music Publishing catalogue as well as shaping the music landscape on a global basis,” added Hani Barhoush, head of Mubadala Capital. “They have been tremendous partners to us.”

The closing of the transaction is subject to certain closing conditions, including regulatory approvals.

Mr Yoshida concluded: “The music business has resurged over the past couple of years, driven largely by the rise of paid subscription based streaming services. I believe the acquisition of EMI Music Publishing will be a particularly significant milestone for our long-term growth.”

Fraser Tennant