After months of rumors, BMI has confirmed it is being acquired by investment firm New Mountain Capital, LLC. Mike O’Neill will sustain his leadership role as BMI’s President & CEO post-sale. No price has been confirmed, but earlier valuations this year sat well north of $1 billion.
As outlined in their acquisition plan, New Mountain, which manages more than $45 billion in assets, will not only purchase BMI, but also allocate additional capital toward the performing rights organization’s growth, technology, and new long-term ventures. CapitalG will also partake with a passive minority investment in BMI.
Despite the change in ownership, BMI’s payout targets remain consistent with previous communications, following the same strategy as in 2023, which yielded an 11% growth in cash distributions over 2022. The growth investment strategy under New Mountain’s guidance focuses on increasing cash distributions, investing in cutting-edge technology, enhancing customer service, and exploring new revenue streams through organic growth and acquisitions.
The current BMI shareholders have pledged $100 million from the sale’s proceeds to BMI affiliates as a non-royalty distribution. The plan to disburse these funds is underway, aiming for an equitable approach in the upcoming months.
Goldman Sachs & Co. LLC and Fried, Frank, Harris, Shriver & Jacobson LLP advised BMI, while Moelis & Company and Simpson Thacher & Bartlett, LLP advised New Mountain. The transaction awaits BMI shareholder and regulatory approvals, with an anticipated closing by the end of Q1 2024.
Mike O’Neill commented, “Today marks an exciting new chapter for BMI that puts us in the best possible position to stay ahead of the evolving industry and ensure the long-term success of our music creators. New Mountain is an ideal partner because they believe in our mission and understand that the key to success for our company lies in delivering value to our affiliates. We are excited about the many ways New Mountain will accelerate our growth plan, bringing new vision, technological expertise, and an outstanding track record of strengthening businesses, all of which will help us build an even stronger future for BMI and our songwriters, composers, and publishers.”
New Mountain Managing Director Pete Masucci emphasized, “BMI has been a trusted guide and champion of music creators from the beginning, and we are privileged to work with the company and its 1.4 million affiliates to build on that incredible legacy. There are numerous growth opportunities ahead for BMI with significant potential to generate more value for the work of its songwriters, composers, and publishers. We look forward to working together alongside Mike and his team to capitalize on those opportunities for the benefit of all BMI stakeholders.”
New Mountain Director Mike Oshinsky added, “While the music industry has undergone a technology-driven transformation over the past two decades, music infrastructure, including the performing rights ecosystem has been slower to transform. There is tremendous opportunity to modernize this critical part of music infrastructure and ensure that long-term royalty collections for songwriters, composers, and publishers continue to grow. With our support, BMI is ideally positioned to drive this transformation as the only PRO in the world to combine an open-door policy to all music creators with the innovation and commercial drive of a for-profit business.”
Two wolves inviting a lamb to dinner.