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Spirit Music Group

Private Equity Invests $500m In Spirit Music Group As The Music Publisher Buys Master Rights From Tim McGraw

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(CelebrityAccess) — Private equity investment firm Northleaf Capital Partners, announced it led a $500 million investment to take a stake in music rights held by Lyric Capital, owner of the independent music publisher Spirit Music Group.

Northleaf led the $500 million investment, which also included Caisse de dépôt et placement du Québec, which was a significant co-investor.

According to Northleaf, the investment will help Spirit Music Group to continue to expand its collection of ‘evergreen’ catalog as well as rights to contemporary hit songs.

“From day one, Spirit has stayed committed to providing unparalleled service to our songwriters and business partners and we’re proud that the health of our company reflects that promise today. This strategic alliance allows us to continue to anticipate our clients’ needs in a constantly evolving market and accelerate our growth strategy of investing in iconic catalogs, elevating new music and serving the needs of the songwriters who entrust us with their life’s work. We are excited to have Northleaf on board who share our vision,” said Jon Singer, Managing Partner, Lyric Capital Group.

“We are delighted to work with the team at Lyric. Our collaboration represents a compelling opportunity in the music royalty space alongside a best-in-class operator. This is a rapidly growing and uncorrelated asset class that provides our investors with predictable and growing cash flows,” added Michael Morris, Managing Director of Northleaf.

Northleaf’s financial advisors for the transaction were Artisan Partners, FTI Consulting and GreensLedge. KPMG served as structuring and tax advisor, and Latham & Watkins LLP and Torys LLP, as its legal advisors.

Eaton Partners, one of the largest placement agents and financial advisory firms and a wholly owned subsidiary of Stifel Financial Corp., acted as exclusive financial advisor and placement agent for Lyric Capital Group. In addition to Eaton, Lyric Capital Group’s advisors included Ropes & Gray, Barnes & Thornburg, Akin Gump, and KPMG.

The news of the investment comes just days after Spirit Music Group announced it had acquired the rights to a multiple master recordings from country hitmaker Tim McGraw.

The deal included three of McGraw’s albums on Big Machine: Two Lanes of Freedom (2013), Sundown Heaven Town (2014) and Damn Country Music (2015), which include some of McGraw’s biggest hits such as the Grammy-winning “Highway Don’t Care”; “Humble & Kind” which was recently certified triple platinum; and the platinum-certified “Truck Yeah.”

“Tim is one of the most prolific artists in country music and it is a unique opportunity to be able to acquire such a remarkable body of work in a competitive music rights market. We thank Tim for entrusting Lyric Capital Group and Spirit Music Group with his songs and are committed to doing our part to further build on the success of these master recordings,” said Ross Cameron, Partner, Lyric Capital Group.

The financial terms of the sale was not disclosed.

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