Concord to Buy Round Hill Music Fund For $689 Million

Concord, under the name Alchemy Copyrights, has agreed to acquire the share capital of Round Hill Music Royalty Fund Ltd in a proposed deal jointly announced on Friday that values the rights in the fund at worth nearly $469 million.

If approved, Concord would acquire the music rights that sit in the publicly-listed Round Hill Music Royalty Fund, which includes 51 catalogs and roughly 150,000 songs by artists like Alice In Chains, Bonnie Tyler, Bush, Bruno Mars, Céline Dion, Lady A, Louis Armstrong, The Offspring, Carrie Underwood, The Supremes, Wilson Pickett and Whitesnake.

Launched in 2010, Round Hill Music was among the first catalog funds to raise money from instititutional investors to acquire and administer song catalogs. But since its November 2022 listing on the London Stock Exchange in November 2020, Round Hill Music Royalty Fund Ltd. has, like its peers Hipgnosis Songs Fund Ltd., struggled with a declining stock price this year as high inflation and interest rates have pressured alternative investments.

News of the Round Hill-Concord deal, reported earlier by Reuters, sent the fund’s stock up nearly 65% on Friday to $1.13 a share from its previous close of $0.69.

Under the proposed deal terms, Round Hill shareholders would receive $1.15 in cash per share, which values the ordinary share capital of the company at roughly $468.8 million.

While Concord’s proposed cash offer represents a premium price, it still represents a discount of approximately 11.5% to Round Hill Music Fund’s economic net asset value per share of $1.30.

In 2022, Round Hill reported its overall group revenues rose 32% year over year to $32.4 million and its portfolio’s fair value rose 13% $602.6 million.

The deal will be put to a shareholder vote at Round HIll’s nex general meeting on Oct. 18 and needs 75% of votes to pass. A group of shareholders led by Josh Gruss, Round Hill Music co-founder and CEO, who own roughly 33% of the fund’s shares have already signaled they will vote in favor of the deal.

“The Board is pleased to present this opportunity for liquidity at a premium to both the share price and the IPO price, as well as at a narrow discount to economic net asset value per share,” commented Robert Naylor, chairman of RHM. “The recommended offer represents excellent value for shareholders.”

Concord CEO Bob Valentine said that since its 2020 IPO, RHM has built an “impressive portfolio” of songs that “stand the test of time” and asserted that his company is “well positioned to maximise the value of this portfolio for all of the songwriters and artists within it.”

He added, “This offer enables RHM shareholders to realise their investment in the business at an attractive premium to the undisturbed share price, while the transaction provides an opportunity to create value for all stakeholders.”