LONDON (Reuters) - Music publisher Chrysalis CHS.L has ended 43 years of independence, agreeing to be sold to a joint venture of Bertelsmann BERT.UL and private equity firm KKR KKR.UL for 107 million pounds.
“Today’s deal marks the end of one era and the start of another,” Chris Wright, co-founder and chairman of Chrysalis — whose catalogue includes Michael Jackson, David Bowie and Jennifer Lopez — said on Friday.
The joint venture, BMG Luxco, agreed to pay 160 pence cash for each Chrysalis share, a premium of 45.5 percent to the share price on October 29, the day before it said it was in offer talks.
The shares were down 0.3 percent at 158.5 pence at 11:54 a.m..
Wright said Chrysalis lacked the scale to compete with the music majors.
“BMG have fantastic resources behind them with Bertelsmann and KKR. I can see, just from the resources they were able to throw at this transaction, how far off the pace we are,” he told Reuters. “It was clearly going to happen at some point.”
Wright, who owns 28 percent of Chrysalis equity, has been invited to join the supervisory board of BMG and become its non-executive UK chairman.
The Chrysalis label, set up by former university social secretaries Wright and Terry Ellis in 1967, started in west London as the Ellis-Wright Agency, changing its name in 1968.
It enjoyed its heyday in the 1980s, counting Billy Idol, Blondie, Siouxsie and the Banshees and Tears For Fears on its recording arm’s roster.
Wright bought out Ellis’ share in 1985 and sold Chrysalis Records to EMI six years later, retaining the publishing business and a catalogue of around 100,000 songs. In 2008, Chrysalis rejected a 104 million pound takeover bid from EMI.
BMG has been on a major catalogue buying spree this year, snapping up Cherry Lane Music Publishing, Evergreen Copyright Acquisitions and UK-based Stage Three Music.
“This is the start of building one of the best music companies in the world,” BMG CEO Hartwig Masuch told Reuters.
“We will be in a much better position to convince creative talent in the UK to join us,” he said, adding BMG was working on a “couple more small acquisitions.”
“Whatever becomes available, whatever makes sense and is of quality, we will look at.”
Editing by James Davey and David Hulmes