Reservoir to list on the NASDAQ via SPAC merger with $788m valuation

Reservoir Founder and CEO Golnar Khosrowshahi

It’s confirmed: New York-based music rights company Reservoir is going public on the NASDAQ via a merger with a SPAC (Special Purpose Acquisition Company).

Reservoir has today (April 14) announced that it has signed a a definitive agreement for a business combination with Roth CH Acquisition Co. II.

The business combination is expected to close in the third quarter of 2021.

The result of the deal is that Reservoir – via the new combined company, Reservoir Media Inc – will go public on the NASDAQ under the ticker “RSVR.”

The transaction gives the combined company an enterprise value of $788 million and is expected to provide approximately $246 million in gross proceeds to the firm.

Upon closing of the transaction, Reservoir founder and CEO Golnar Khosrowshahi will continue to lead the combined company.

A media release noted: “Reservoir will be the first independent music company to go public in the United States and also the first female founded and led music company to be publicly traded in the United States.”

In connection with the merger announcement, the companies executed definitive agreements with institutional investors, including funds managed by Caledonia, for a common stock PIPE of $150 million at $10.00 per share.

Existing Reservoir shareholders are rolling 100% of their equity as part of the transaction.

Reservoir has invested and deployed over $100 million in its frontline creative signings, and more than $400 million in catalog acquisitions, since being founded in 2007.

It said today that following its NASDAQ float, it “expects to continue to follow its disciplined acquisition strategy”.

“Our dedication to our songwriters and artists and their music is at the heart of everything that we do, and this path to growth supports our promise to service our clients, enhance value, and build a quality catalog.”

Golnar Khosrowshahi, Reservoir

Golnar Khosrowshahi commented, “From day one, our mission has always been to be the best independent music company in the industry. Today we have taken an important step forward in Reservoir’s evolution to fully realize that vision through our partnership with Roth CH II.

“Our dedication to our songwriters and artists and their music is at the heart of everything that we do, and this path to growth supports our promise to service our clients, enhance value, and build a quality catalog. I am immensely proud of what we have built alongside President & COO Rell Lafargue, and our incredible team whose excellent skills, high-touch client service, and outstanding track record is unmatched.”

“We look forward to Reservoir pursuing future organic growth and acquisitions in this exciting sector under consolidation.”

Roth CH II partners

Partners of Roth Capital and Craig-Hallum, sponsors of Roth CH II stated, “We are thrilled to be partnering with Reservoir and its exceptional leadership team. Reservoir has built an outstanding collection of hit songs and soundtracks in both its music publishing and masters businesses, and has a unique and differentiated value enhancement model that drives highly attractive returns.

“We are excited about Reservoir’s strong cash flow generating capabilities in a growing industry with significant tailwinds. The portfolio is fully diversified in all genres of music with some of the most iconic hits of the past hundred years. We look forward to Reservoir pursuing future organic growth and acquisitions in this exciting sector under consolidation.”

Reservoir’s music publishing catalog consists of more than 130,000 copyrights. It includes evergreen compositions such as “It’s Your Thing” by The Isley Brothers, “Ring of Fire” by Johnny Cash, “Take Me Home, Country Roads” by John Denver, and “Señorita” by Shawn Mendes and Camila Cabello.

The company’s notable frontline roster signings include songwriters such as Ben Harper, Migos’ Offset and Takeoff, 2 Chainz, Danja, James Fauntleroy, and Ali Tamposi.

The company’s recorded music business consists of more than 26,000 sound recordings.

Rumours that Reservoir may be headed for a public listing via a SPAC merger were first reported by Bloomberg last month.Music Business Worldwide