Universal Music Group Acquires Minority Stake In Chord Music Partners For $240 Million

By Amit Chowdhry ● Feb 21, 2024

Universal Music Group (UMG) – a leader in music-based entertainment and Dundee Partners (the investment office of the Hendel family) announced that UMG will acquire a 25.8% interest in Chord Music Partners (Chord) for US$240 million (approximately €223 million when converted into € at the current EUR/USD rate at the time) in a deal that values Chord at US$1.85 billion.

Chord – which was formed in 2021 by KKR and Dundee Partners – is a pure-play catalog of premier music intellectual property (IP). And Chord’s portfolio includes works from many iconic 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 and Dundee Partners will enter into a new long-term strategic partnership for actively managing Chord’s rights through UMG’s global network and to acquire additional catalogs via Chord in the future. And Chord’s music publishing rights will be administered through Universal Music Publishing Group (UMPG) and recorded music through UMG’s Virgin Music Group (VMG).

KKR will exit Chord on the completion of the transaction, with the Dundee consortium and UMG owning 74.2% and 25.8% respectively. And as a leader in music-based entertainment, UMG is positioned and resourced to manage and drive growth for Chord’s existing rights catalogs, while UMG and Dundee Partners are aligned in their long-term vision for the acquisition, management and growth opportunities for significant, timeless music-rights catalogs.

UMG was advised by Goldman Sachs, Kirkland & Ellis LLP and Freshfields. And DLA Piper and Axinn, Veltrop & Harkrider LLP served as legal advisors to Dundee. Fifth Third Bank, National Association served as financial advisor and provided committed financing to Dundee and UMG. The Raine Group served as the exclusive financial advisor, and Manatt, Phelps, and Phillips, LLP served as the legal advisor to Chord Music Partners. Latham & Watkins LLP. served as legal counsel to KKR.

KEY QUOTES:

“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.”

  • Sir Lucian Grainge, Chairman and CEO of Universal Music Group

“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.”

  • Boyd Muir, Universal Music Group’s Executive Vice President, Chief Financial Officer and President of Operations

“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.”

  • Sam Hendel, Dundee Partners’ Managing Principal and Co-Founder of Chord

“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.” 

  • Jenny Box, Partner, KKR