Rumors are swirling that Kobalt Music Group could be heading towards a sale.
According to a Bloomberg report citing industry sources, the firm is exploring “strategic options including a potential sale”.
Kobalt Music Group Ltd is the operating company of Kobalt, servicing songwriters as a global publisher, in addition to being a distribution and services provider to artists (via AWAL).
Kobalt Music Group also runs a neighbouring rights division. The company additionally manages a fund, Kobalt Capital Ltd, which acquired SONGS Music Publishing for around $160m in 2017.
Bloomberg suggests that Kobalt’s potential buyers could include the three major music companies, as well as private equity and technology companies.
One source suggested the company could choose to raise additional capital instead. Bloomberg suggests that if Kobalt is sold, it could fetch more than $1bn.
A Kobalt spokesperson told MBW in response: “We’ve always had great interest in the company. This is nothing new.
“We’re always evaluating the best capital structure for the business to make sure we have the right capital partners to continue to build and grow the world’s best independent company for artists and songwriters.”
The likes of Sir Paul McCartney and Max Martin are minority shareholders in Kobalt, whose largest financial backers include Hearst Entertainment and Michael Dell’s MSD Capital LP.
“We’re always evaluating the best capital structure for the business to make sure we have the right capital partners to continue to build and grow the world’s best independent company for artists and songwriters.”
Kobalt is led by CEO, Laurent Hubert, and Chairman and founder, Willard Ahdritz.
Earlier this year, the firm told MBW of its aim to be profitable by the end of next summer.
In FY2019, the 12 months to end of June 2019, its revenues across all of its business divisions reached $543.4m, up 35.1%.
In terms of ‘gross collections’ – which factor in gross neighbouring rights revenues, rather than slimming them down to net – Kobalt says its total sales in the year hit $616m, up 25% YoY.Music Business Worldwide
