Hipgnosis donates money to Big Deal to boost songbook
Hipgnose (SONG), the £ 773million closed-end royalty fund, boosted its song portfolio with the acquisition of Big Deal Music and also added the back catalog of rock singer Chrissie Hynde.
The Guernsey-listed fund, which was set up by Merck Mercuriadis, former Beyonce manager and Sanctuary label boss in 2018, spent part of the £ 236million it raised in a C-share issue in July during its first large-scale business acquisition. The cost of the deal – which is part of the £ 1bn pipeline that Hipgnosis said it has developed – has not been disclosed, but the equity component has been valued at £ 21.2m.
Big Deal Music, which owns the copyrights to more than 4,400 songs, including One Direction’s “Story of My Life” and Shawn Mendes “Stitches”, will be renamed Hipgnosis Songs Group and will also add a “Music Platform”. American full-service ‘to Hipgnosis’ list.
Mercuriadis said Big Deal supports early stage songwriters and then “works hard to put them in theaters with the world’s most established songwriters and artists” to deliver hit songs.
He said the platform company provides “song creation, song administration and song management,” skills that will now be transferred to the entire Hipgnosis song catalog.
“I’ve always been clear that I think we have an important responsibility when it comes to our culturally important songs and the benchmark songwriters who entrusted them to us,” said Mercuriadis.
“We are now going to take what is the broken traditional music publishing model and replace it with our concept of song management, where we grow, love and get the most out of our songs and put the most into them.”
Purchase of Big Deal, which operates in Los Angeles, New York and Nashville, is expected to give “greater control” over third-party administration costs, provide faster collection of royalty revenue and develop relationships with streaming services such as Spotify. which “will allow Hipgnosis to take advantage of its portfolio to obtain better rates”.
Christopher Brown, investment firm analyst at Hipgnosis corporate broker JPMorgan Cazenove, said the deal “transforms” the alternative income fund and the new in-house expertise will “allow it” to deliver on its promise to manage actively his wallet by placing songs and collecting revenue more effectively ”.
“Hipgnosis is one of the most attractive investments not only in the investment company sector but also in the wider stock market,” he said, adding that it was a “sign of confidence” that the dividend target has been raised to a yield of 4.3%. .
Brown said that even with a 9% premium, the stocks “represent exceptional value” given the potential for market growth and active song management.
In addition to the exceptional acquisition of Big Deal Music, Hipgnosis continued its proven strategy of buying individual catalogs, most recently that of The Pretenders lead singer and songwriter Chrissie Hynde (pictured).
Hynde, who formed the group in 1978, wrote hits such as “Don’t Get Me Wrong”, “I’ll Stand By You” and “Brass in Pocket”, the group’s first UK number one in 1980. She continues to tour with the group.
Hipgnosis acquired 100% of Hynde’s music publishing catalog of 164 songs, including editing and the writer’s share of The Pretenders and his other projects.
Mercuriadis said the deal was “very personal” as Hynde is “one of my all-time favorite songwriters and The Pretenders is one of my favorite bands,” and he went vegetarian and then vegan there. 35 years ago because of a longtime animal rights activist. Hynde’s influence.
“She has this powerful effect on her audience, which is why they remain so dedicated and engaged after 40 years and why new generations of fans are constantly drawn to her,” he said.