OC&C advises on $750 million investment in music company Kobalt

15 September 2022 Consulting.us 2 min. read

London-based music publisher Kobalt has sold a controlling stake in its business to Francisco Partners for $750 million, with OC&C Strategy Consultants providing strategic and commercial due diligence services to the buy-side team.

Francisco Partners – a media-focused private equity firm headquartered in the Bay Area – has reportedly purchased 90% of Kobalt, according to Music Business Worldwide. The remaining 10% will be split between Kobalt founder Willard Ahdritz and additional investors Dundee Partners and Music.

Kobalt was founded in 2000 and is based in London. A leading independent music publisher, Kobalt serves 700,000+ songs spanning artists such as Paul McCartney, Max Martin, Drake, Childish Gambino, Foo Fighters, Beck, and Phoebe Bridgers. The firm has more than 500 employees globally, according to LinkedIn.

The company’s technology platform tracks and collects royalties for the trillions of micropayments in digital music today (e.g. plays on streaming services). Kobalt in 2015 acquired AMRA, significantly boosting its capabilities in direct collection.

OC&C advises on $750 million investment in music company Kobalt

“For over 20 years, Kobalt has been a music leader with technology as a core part of our focus, and I can’t think of a better investor than Francisco Partners to back our vision and invest deeply in our ambitious technology development and creator services,” Ahdritz said.

Ahdritz will remain chairman of Kobalt and the company will continue to be led by its current management team. Matt Pincus, CEO of Music, will join Kobalt’s board.

Laurent Hubert, CEO of Kobalt, added, “We look forward to working with Francisco Partners to embark on Kobalt's next innovation chapter. The combination of FP's expertise in technology and our deep understanding of the music industry will ensure that Kobalt expands its reach and impact as a global music publisher.”

Kobalt last year sold its Artists Without a Label (AWAL) digital music distribution unit to Sony Music Entertainment for $430 million.

Matt Spetzler, partner at Francisco Partners, says his firm’s investment will bring Kobalt more resources and help it grow its digital platforms.

Mario Razzini, another partner at the PE firm, said, “We believe Kobalt is and should be the premier platform for independent creators, and we look forward to helping them achieve this both organically and inorganically.”

Goldman Sachs served as financial advisor to Kobalt and Raine Group served as financial advisor to Francisco Partners. OC&C Strategy Consultants provided strategic and commercial due diligence services to Francisco Partners.