Report: BMI May Sell to Private Equity Firm for $1.7B

BMI is considering an offer to sell to New Mountain Capital, a private equity firm that has been quietly looking at music assets over the last few years, according to sources. The deal has yet to be signed, as New Mountain Capital has entered an exclusive window to scrutinize the deal.

Billboard quotes sources suggesting that if the deal closes, New Mountain Capital will pay about $1.7 billion for BMI which claims $145 million in earnings before interest, taxes, depreciation and amortization in its first year acting as a for-profit entity, which was announced last October. That suggests that BMI — aka Broadcast Music Inc. — is trading on a nearly 12 times EBITDA multiple. Since BMI has no debt, it’s likely that New Mountain Capital will use a healthy level of debt to finance the deal.

According to New Mountain Capital’s website, the firm has $40 billion in assets under management and chases a “growth-oriented, value-add investment approach, rather than reliance on excessive risk, as the best path to high and consistent long-term returns.” The firm has made investments in such industries as software, business services, information and data, logistics and financial services among a few other sectors.

Besides New Mountain, sources say, bidders included Apollo Global Management, Brookfield Asset Management and its music investment Primary Wave, and RedBird Capital Partners. New Mountain and Brookfield/Primary Wave became the finalists until BMI decided to move forward and look at New Mountain’s offer. Moreover, sources add that Moelis & Co. has been acting as an advisor to New Mountain while BMI has acknowledged that it hired Goldman Sachs to explore a strategic partnership.

BMI first put itself up for sale last year and at the time said it was switching from a not-for-profit operation to a for-profit company. In its fiscal 2022, before it switched to a for-profit entity, BMI reported that it collected $1.573 billion, while distributions totaled $1.471 billion. 

Since its formation in 1940, BMI has been operating as a not-for-profit organization, paying out all of the money it collects to songwriters and publishers, even though it was a private company. In response to the songwriter and creator organization letter, BMI president Mike O’Neill said that because of its first year acting as a for-profit entity, it has allowed the company to upgrade its services portal, including new dashboards, among several other initiatives. He also said in pursuing a BMI sale, the company “would ensure that any partner embraces our mission of prioritizing the interests of songwriters, including their financial success.