Universal Music buys $240m stake in Chord Music Partners

Universal Music Group is buying a minority stake in Chord Music Partners, a platform established by investment giant KKR with Dundee Partners, for USD $240 million.

UMG and Dundee Partners, the investment office of the Hendel family, have announced that UMG will acquire a 25.8% interest in Chord Music Partners in a deal that values Chord at USD $1.85 billion.

The transaction will see KKR sell its majority stake in Chord to current shareholder Dundee Partners and its investor consortium with a minority stake held by UMG.

According to the announcement on Tuesday (February 20), “KKR will exit Chord upon completion of the transaction, with the Dundee consortium and UMG owning 74.2% and 25.8% respectively”.

Additionally, according to Tuesday’s announcement, UMG and Dundee Partners will enter into a new long-term strategic partnership to actively manage Chord’s rights through UMG’s global network and to acquire additional catalogs via Chord in the future.

UMG will globally administer publishing and distribute recordings for Chord’s existing catalogs, which contain more than 60,000 music copyrights.

Chord’s music publishing rights will be administered through Universal Music Publishing Group (UMPG) and recorded music through UMG’s Virgin Music Group (VMG).

Chord was formed in 2021 by KKR and Dundee Partners, and is described by UMG as “a pure-play catalog of premier music intellectual property (IP)”.

In 2021, KKR and Dundee Partners, via the Chord Music Partners platform, acquired the KMR Music Royalties II portfolio from Kobalt Capital for approximately $1.1 billion.

Chord’s portfolio includes works from artists and songwriters, including The Weeknd, Ryan Tedder/OneRepublic, David Guetta, Lorde, Kid Cudi, Diplo, Jimmy Jam & Terry Lewis, Ellie Goulding, ZZ Top, John Legend, Twenty One Pilots and many more.

UMG said on Tuesday that it “is positioned and resourced to manage and drive growth for Chord’s existing rights catalogs, while UMG and Dundee Partners are both aligned in their long-term vision for the acquisition, management and growth opportunities for significant, timeless music-rights catalogs”.

“We look forward to creating maximum commercial and creative value for the songwriters and artists in Chord and building for the future.”

Sir Lucian Grainge, Universal Music Group

Sir Lucian Grainge, Chairman and CEO of Universal Music Group said:  “Finding partners who share our passion for identifying iconic songs and recordings that will stand the test of time and deliver long-term growth is essential, which is why we’re so pleased to be working with Stephen and Sam Hendel and Dundee Partners.

“With the leadership of Jody Gerson at UMPG, Nat Pastor and JT Myers at Virgin, and the support of our experienced creative executives around the world, no one can do more with music rights than our teams.

“We look forward to creating maximum commercial and creative value for the songwriters and artists in Chord and building for the future.”

“We’re thrilled to be partnering with Universal Music Group and embarking on this next exciting chapter for Chord.”

Sam Hendel, Dundee Partners / Chord

Sam Hendel, Dundee Partners’ Managing Principal and Co-Founder of Chord, said: “We’re thrilled to be partnering with Universal Music Group and embarking on this next exciting chapter for Chord.

“By combining a best-in-class financial acquisition vehicle with the world’s leading music company, we are creating both a premier platform for music investment as well as a permanent home for premier artist’s legacies and their iconic cultural works.

“We’d like to thank the team at KKR for their partnership and creating a strong foundation for Chord and its future success.”

“We are grateful to have had the opportunity to collaborate with many leading artists and to create significant value for our investors by building Chord into a differentiated and scaled portfolio.”

Jenny Box, KKR

Jenny Box, Partner, KKR, said: “We are grateful to have had the opportunity to collaborate with many leading artists and to create significant value for our investors by building Chord into a differentiated and scaled portfolio.

“We believe that Dundee and UMG will drive further value creation for artists and that they share our commitment to being respectful stewards of artists’ music.”

“We’re excited to partner with the Hendel family in Chord for a number of reasons.”

Boyd Muir, Universal Music Group

Boyd Muir, Universal Music Group’s Executive Vice President, Chief Financial Officer and President of Operations, said: “We’re excited to partner with the Hendel family in Chord for a number of reasons.

“First, KKR and Dundee have built a very high-quality catalog that will benefit from our first-rate management and global capabilities. Second, this new structure provides us with an efficient vehicle for future catalog acquisitions, without significant capital allocation through a combination of leverage and partner equity capital.

“And finally, it offers us the perfect partner to approach future growth opportunistically and flexibly, one who is equally bullish on the long-term prospects for music.”

Music Business Worldwide