Round Hill Shares Skyrocket on £376m Music Deal
Shares in the copyright owner of a string of songs by the Supremes and Louis Armstrong surged 64% yesterday after it agreed to a £376m US takeover.
Round Hill Music Royalty (RHM), whose catalogue of over 150,000 songs includes I’d Do Anything For Love (But I Won’t Do That) by Meat Loaf, announced a deal with Nashville-based Concord.
The announcement also drew attention to London-listed competitor Hipgnosis, whose shares jumped more than 15.6% amid speculation that it could become an attractive takeover target. Hipgnosis’ catalogue includes songs from Shakira and Neil Young.
RHM was founded by Josh Gruss, a former Bear Stearns investment banker with previous experience in the music industry.
Gruss will receive approximately £24m for his stake in the company.
Concord CEO Bob Valentine stated that RHM had “built an impressive portfolio of music rights which generate revenue across a variety of income streams”.
RHM’s catalogue mainly consists of “evergreen” music produced before 2010. Their business model involves acquiring the rights to musicians’ back catalogues, providing them with a one-time payment. They then earn revenue when the songs are played on the radio or streaming platforms.
The highest-earning song last year was the melancholic 1975 hit All By Myself written by Eric Carmen, followed by Louis Armstrong’s What A Wonderful World.
These songs helped the company generate royalties of £29m and a profit of £850,000.
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