Financial firm Blackstone has signed a definitive agreement to buy eOne Music from Hasbro for $385 million, the companies announced Monday (April 26).
According to a press release from Hasbro, its entire music operation, including its music operation in Canada, will be acquired by Blackstone controlled entities. Blackstone has nearly $650 billion in assets under management through a variety of investment vehicles, including SESAC music operations which includes the Harry Fox Agency. eOne Music will be a separate stand-alone operation, according to the announcement, helmed by its current global president Chris Taylor, “who will focus on building a creator-first music brand with global scale and expertise.”
“I’m excited to continue to lead and grow this exceptional business,” Taylor said in a statement. “We want the creative community to know that we are focused on making sure that this only benefits them and the work we do together.”
eOne Music generated about $120 million in annual revenue in 2019, according to Entertainment One’s financial results. About one-third of that coming from the Audio Limited production music operation, which was acquired in 2019 for about $215 million, meaning that record label operations generated the bulk of the remainder $80 million in revenue.
The eOne Music catalog includes ownership of the famed Death Row Records rap catalog, Dualtone Records, Canadian label Last Gang Records, a small music publishing operation and a digital indie distribution company. Its portfolio also includes the catalogs of other labels acquired by eOne, including DRG’s Broadway soundtracks, Sheraton Square’s rock recordings, and Compendia and Light Records’ Christian/gospel music.
Billboard broke the news that Hasbro was shopping the company last month. Sources told Billboard at the time that Hasbro was seeking $600 million for its music operation and subsequently said that Hasbro would only accept minimum bids of $200 million for either eOne Music or Audio Limited, or at least $400 million for both.
That means that if Entertainment One properly priced Audio Limited valuation when it acquired that company, then the recorded masters, and its other small business operation — digital distribution, music publishing and artist management — received a valuation of about $170 million.
“This transaction will ensure that eOne Music is well positioned to unlock great opportunities for its many talented artists and partners, as Hasbro continues to focus on the core strategic elements of our Brand Blueprint to further strengthen our position as a purpose-led play and entertainment company,” said Hasbro chairman and CEO Brian Goldner in a statement.
The transaction, which is subject to customary closing conditions and receipt of regulatory approvals, is expected to close in the second or third quarter of 2021. J.P. Morgan is acting as exclusive financial advisor to Hasbro on the transaction, Cravath, Swaine & Moore LLP, Mayer Brown International LLP and Stikeman Elliott LLP are acting as legal counsel to Hasbro and Osler, Hoskin & Harcourt LLP are acting as legal counsel to Entertainment One Canada Limited.
