Square (SQ) Buying Majority Stake Of TIDAL In $297 Million Deal

By Amit Chowdhry ● March 4, 2021
  • Square Inc (NYSE: SQ) announced that it entered into a definitive agreement to acquire a majority ownership stake in TIDAL as part of a $297 million deal. These are the details.

Today Square Inc (NYSE: SQ) announced that it entered into a definitive agreement to acquire a majority ownership stake in TIDAL, which is a global music and entertainment platform that brings fans and artists together through music and content. And Square expects to pay a mix of cash and stock of $297 million for a significant majority ownership stake. The existing artist shareholders will be the remaining stakeholders. TIDAL is going to operate independently within Square along with the Seller and Cash App ecosystems.

The deal extends Square’s purpose of economic empowerment to a new vertical: musicians. Artists are known for being entrepreneurs with a dream and deserve access to systems, tools, and financial freedom to reach those dreams at every stage in their career. And Square has helped millions of businesses start, run, and grow by providing them with tools needed for success. Through Cash App, Square has made financial services more relatable and accessible to millions of customers — many of whom have been historically overlooked and underserved. Plus Square sees an opportunity to utilize those learnings to help musicians find new ways to support their work and make better decisions through TIDAL.

TIDAL is known as the only music service built by artists, for artists. And TIDAL offers premier listening experiences with superior sound quality and an extensive catalog of more than 70 million songs and 250,000 high-quality videos. Plus TIDAL puts the fan experience at the center of every decision, providing artists direct access to their audience and allowing fans deeper connections to their favorite artists through original, exclusive, and curated content and events. Currently, TIDAL has a global presence with listeners in more than 56 countries and relationships with more than 100 labels and distributors.

TIDAL board member and shareholder Shawn “JAY-Z” Carter is expected to join Square’s Board of Directors subject to the closing of the transaction. Carter is known for founding preeminent entertainment company Roc Nation and sports agency Roc Nation Sports. And he launched and owns the successful “Made In America” festival and executive-produced award-winning documentaries, among other achievements. Over the past few years, Carter has remained relentlessly committed to giving back to underserved communities, including through his work with the Shawn Carter Foundation and The REFORM Alliance. Along with JAY-Z, all of TIDAL’s artist shareholders will continue to be co-owners of TIDAL after the deal closes.

Based on current information, Square is not expecting TIDAL’s financial results to have a material impact on Square’s consolidated revenue or gross profit in 2021. And the completion of this transaction is subject to customary closing conditions including regulatory approvals. The parties expect to close the transaction in the second quarter of 2021. 

KEY QUOTES:

“It comes down to one simple idea: finding new ways for artists to support their work. New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”

— Jack Dorsey, cofounder and CEO of Square

“I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers. Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”

— Shawn “JAY-Z” Carter

“TIDAL sets a high standard for supporting artists, capturing music culture, and delivering the best audio quality to fans. Square has also set a high standard for building elegant, accessible, and fair tools for sellers and individuals to economically empower them. Together, TIDAL and Square will be music-obsessed and artist-focused while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”

— Jesse Dorogusker, a Square executive who will serve as interim lead of TIDAL upon the closing of the deal