Private equity firm Rizvi Traverse Management has agreed to sell music rights organization SESAC to another firm, Blackstone, the companies announced on Wednesday. Financial terms of the deal have not been disclosed, but this marks Blackstone’s first step in a new strategy to hold onto private investments longer than most equity firms, a point highlighted by SESAC CEO John Josephson in the announcement.
“Blackstone is acquiring our company with the specific intent of backing the existing management team, and shares our long-term vision for the company with a history of adding value to their portfolio companies as a supportive strategic partner and capital provider,” he said. “We anticipate a seamless transition in ownership with no disruption to our business activities as a result of this transaction.”
Nashville-based SESAC is unique in that it administers public performance, mechanical, synchs and other rights under one roof. This transition into a multi-rights organization became solidified with 2015’s acquisition of the Harry Fox Agency, a leading mechanical rights organisation. Publishers’ Association of HFA, which licenses mechanical rights, SESAC became the only US-based music rights organisation to administers public performance, mechanical, synchronisation and other rights all within one roof. SESAC represents the rights to 30,000 members, including Bob Dylan, Neil Diamond, RUSH, Charli XCX (PRS), Zac Brown, Mumford & Sons (PRS), Lady Antebellum, Mariah Carey, Axl Rose, Shirley Caesar, and Robin Thicke.
“We view SESAC as an attractive fit for our core private equity investment platform and are pleased to partner with the company’s experienced, highly capable management team to help support their growth strategy over the long term to continue to serve their key affiliate and licensee constituents,” commented Blackstone managing director David Kestnbaum.
SESAC was initially founded in 1930, but its development really started in 1993, when investors led by Stephen Swid, the former business partner of Marty Bandier and Charles Koppelman, bought the society and started to aggressively grow its business. In 2012, investment bank Allen & Co. and hedge fund Och-Ziff were shopping the company and eventually sold it to its current owners, Rizvi Traverse, for a transaction estimated at $500 million. As a privately-owned rights society, SESAC is not bound by the consent decrees that rule the two main performance rights society in the US, ASCAP and BMI.