BMG Rights Management to Purchase Bug Music

1:24 PM PST 09/12/2011 by Wolfgang Spahr, Billboard Staff

The deal, estimated to be valued at $300 million, is expected to close by October.

BMG Rights Management is buying U.S. music publisher Bug Music, Inc., which was Founded in 1975 and is headquartered in Los Angeles.

Financial terms of the transaction, which is expected to close by October, were not disclosed, although sources tell Billboard the deal is valued at $300 million. J.P. Morgan acted as financial advisor and Latham & Watkins acted as legal advisor to Bug Music.  The deal was reached with Spectrum Equity Investors, a private equity firm, and Crossroads Media, Inc., which control Bug Music, Inc.

"With the acquisition of Bug Music and its vast collection of evergreen and contemporary compositions, BMG further establishes itself as a leading music rights management company," said Hartwig Masuch, CEO of BMG Rights Management. "We look forward to working with Bug Music's exceptional roster of artists and songwriters."

BMG Rights Management is a joint venture between the international media company Bertelsmann AG and Kohlberg Kravis Roberts & Co., a leading global investment firm.

Bug Music is an independent music publisher that currently owns and/or manages copyrights of such hits such as "Fever", "What a Wonderful World", "I Walk the Line", "Summer in the City", "The Real Slim Shady", "Who Are You?", "Under the Boardwalk" and "The Passenger."  The independent publisher's clients include the estates of musical legends Johnny Cash, Willie Dixon, Muddy Waters, Woody Guthrie, Del Shannon and Stevie Ray Vaughan, as well as contemporary icons such as Iggy Pop, Kings of Leon, Ryan Adams, Wilco and The National. 

The publishing company was slated to purchase Bug earlier this year, but now with a reported lower price the timing was evidently better. BMG sources say the publishing giant intends to acquire more music catalogs this year.

This week BMG is the number one publisher on the U.S., U.K. and German charts.

Since its founding in 2008, BMG has established a presence in eight core music markets representing the rights of more than 300,000 song recordings including those by Crosstown Songs, Cherry Lane Music Publishing, Stage Three Music, Evergreen Copyrights and Chrysalis group. Industry insiders estimate BMG's revenues in 2011 could be as high as 200 million euros ($272 million U.S). The music publisher has 200 employees.

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