BMI is reportedly considering an offer to sell to private equity firm New Mountain Capital for $1.7 billion.
Private equity firm New Mountain Capital is looking to buy performance rights organization Broadcast Music Inc. (BMI) to the tune of $1.7 billion, sources close to the situation tell Billboard. The deal is yet to be signed, while New Mountain Capital has entered an exclusive window to look it over.
Sources indicate that New Mountain Capital will pay around $1.7 billion for BMI if the deal closes. In its first year as a for-profit entity, the performance rights organization claimed $145 million in earnings before interest, taxes, depreciation, and amortization.
New Mountain Capital’s website says the firm has $40 billion in assets under management and utilizes a “growth-oriented, value-add investment approach, rather than reliance on excessive risk, as the best path to high and consistent long-term returns.” The firm has invested in industries including software, business services, information and data, logistics, and financial services, among others.
BMI first announced it was selling itself in October last year as it transitioned from a not-for-profit entity to a for-profit company.
Before switching to a for-profit model, BMI reported in its fiscal 2022 that it collected $1.573 billion, with distributions totaling $1.471 billion. Many songwriters and publishers have questioned the company’s move, despite BMI stating that the shift will enable spending more money on developing technology and infrastructure to support songwriters better.
Bidders throwing their hat in the ring for BMI are said to have included Apollo Global Management, Brookfield Asset Management and its music investment Primary Wave, and RedBird Capital Partners. Sources say Moelis & Co. has facilitated advice to New Mountain in the deal, while BMI acknowledges hiring Goldman Sachs to explore its strategic partnerships.
Until this year’s shift to a for-profit company, BMI has operated as a not-for-profit organization since its formation in 1940, paying out the money it collects to songwriters and publishers. BMI president Mike O’Neill says that in pursuing a BMI sale, the company will “ensure that any partner embraces our mission of prioritizing the interests of songwriters, including their financial success.”