(CelebrityAccess News Service) – The Sanctuary Group has agreed in principle to acquire Music World Entertainment from Mathew Knowles. MWE is responsible for the management of multi-million selling acts including Destiny’s Child, Beyoncé, Kelly Rowland, Michelle Williams, Solange Knowles, Blaque, and comedian Ricky Smiley.
Sanctuary and MWE have signed binding Heads of Agreement and intend to complete the transaction as soon as practicable subject to further due diligence and the agreement of a long-form sale and purchase agreement. The transaction will consist of a consideration of $10 million/ £6.06 million to be funded through $7 million/ £4.25 million of cash and the issue of Ordinary Shares to the value of $3 million/ £1.81 million. The price per share will be the lesser of the average closing price for the five days immediately prior to completion and 55 pence.
In addition to the acquisition, Mathew Knowles will be named president of Sanctuary’s new urban division – reporting to Sanctuary Group Inc. CEO Merck Mercuriadis – and will continue to manage his roster of artists. He will enter into an initial five year employment with Sanctuary, which can be extended for a further five years at Sanctuary’s option. Strategically, the deal also involves setting up a joint venture record label through Sanctuary Records Group / BMG Distribution to develop urban and gospel acts, along with music publishing, as well as the creation of an urban tour agency in the U.S.
“I am thrilled to welcome Mathew and his artists to Sanctuary," said Andy Taylor, executive chairman, the Sanctuary Group. "This is a groundbreaking deal for Sanctuary, putting us directly into the management of acts involved in urban music, which is one of the most popular music genres in the world. Mathew Knowles and his team at MWE have a pre-eminent reputation and have had phenomenal success. The quality of the artists managed adds considerable value to our roster, as well as being highly and immediately cash generative. Mathew will also bring Sanctuary into the large global market for gospel music.”
“Having established four of the most important and successful worldwide brands in the urban world I believe that this marriage with Sanctuary will not only allow me to make Destiny’s Child, Beyoncé, Kelly, Michelle and our other clients bigger and better, but it also provides me with a worldwide infrastructure and expertise that is truly unique with which to revolutionize the urban business and for the first time ever ensure that the power is in the hands of the urban artists," said Mathew Knowles, CEO Music World Entertainment. "Our goal is to establish the Sanctuary / MWE brand as the market leader in taking urban artists to new heights of success and earning power.” –Bob Grossweiner and Jane Cohen