BMG/KKR music venture makes first acquisition

* BMG Rights snaps up Crosstown Songs

* Person familiar says deal worth around $70 million

* Songs include hits by Britney, Madonna, Celine

By Yinka Adegoke

NEW YORK, July 23 (Reuters) - BMG Rights Management, the
music venture owned by Bertelsmann and KKR, said on Thursday it
has agreed to its first acquisition by buying a catalog of
songs including "Who Let the Dogs Out" and "Livin La Vida
Loca."

Financial terms of the deal to buy the Crosstown Songs
America catalog were not disclosed, but a person close to the
deal said it was around the "mid double-digit millions" of
euros, or around $70 million.

Crosstown's website says its catalog of 8,000 songs is
worth around $80 million. The tunes include some featured on
recent top-selling albums by the likes of Britney Spears and
Madonna, as well as hits from the last two decades by Ricky
Martin, Celine Dion and others. The Los Angeles-based Crosstown
is currently owned by CalVal Investors, a fund that manages
opportunistic value investments.

German media giant Bertelsmann [BERT.UL] and private equity
firm Kohlberg Kravis Roberts & Co [KKR.UL] announced the BMG
Rights joint venture earlier this month, saying it would be a
more efficient way of managing music rights under one roof.

KKR has committed to investing about 250 million euros
($360 million) in the business in which it owns a 51 percent
stake. Bertelsmann owns the remaining 49 percent.

The companies have indicated they would be prepared to
raise extra funds to acquire a major catalog of songs if one
became available. There has been speculation that beleaguered
London-based private equity firm Terra Firma might be forced to
sell its valuable EMI Music [LNDONE.UL] publishing catalog, the
second-largest catalog of songs in the world.

Music industry-watchers are also monitoring the fallout
from the death of Michael Jackson, which could see the singer's
half of the Sony/ATV Music Publishing joint venture put up for
sale. That catalog includes the vast majority of songs by the
Beatles. Sony Corp (6758.T) owns the other half of the
venture.

Financial and media investors have become increasingly
attracted to music publishing rights as an asset class even as
the recorded music business has shrunk due to piracy and the
ascendancy of digital music.

Such investors are keen to benefit from a perceived steady
and recurring cash flow from managing the rights of songs and
songwriters rather than dealing with what is seen as the
terminal decline of the recorded music business.

Dutch pension fund ABP was estimated to have paid around
$200 million for the Rodgers & Hammerstein catalog of songs in
April while private equity firm Pegasus Capital paid an
estimated $55 million for Spirit Music Group, a song publisher
with rights to artists from Frank Sinatra to Madonna.
1 Eur=US $1.42
(Reporting by Yinka Adegoke, editing by Matthew Lewis)