Universal Music Group Takes $240 Million Minority Stake in Music String Partners

Universal Music Group (UMG), the world's largest music company, has acquired a 25.8% stake in Chord Music Partners for $240 million. As part of the deal, UMG will now handle distribution and publishing management for Chord's existing catalog, supplied by UMG's Virgin Music Group and Universal Music Publishing Group (UMPG), respectively.

Chord was founded in 2021 by KKR and Dundee Partners, the investment office of the Hendel family, and owns over 60,000 copyrights. This includes bets on top songs like Fleetwood Mac's “Dreams” and “Landslide,” ZZ Top's “La Grange,” OneRepublic's “Counting Stars” and “Apologize,” Childish Gambino's “Redbone,” “I Like Me Better” by Lauv, “Pursuit of Happiness” by Kid Cudi, “All Of Me” by John Legend, “Girls Like You” and “Sugar” by Maroon 5, “Halo” by Beyonce and “A Thousand Years” by Christina Perry.

Upon completion of the transaction, KKR will exit Chord. Previously, he was the majority shareholder in the directory company. Dundee now increases its stake to 74.2% and UMG will hold the remaining minority stake.

UMG was advised by Goldman Sachs, Kirkland & Ellis LLP and Freshfields. DLA Piper and Axinn, Veltrop & Harkrider LLP served as legal advisors to Dundee. Fifth Third Bank, National Association served as financial advisor and provided committed financing to Dundee and UMG. The Raine Group served as exclusive financial advisor and Manatt, Phelps and Phillips, LLP served as legal advisor to Chord Music Partners. Latham & Watkins LLP served as legal counsel to KKR.

Lucian GrangePresident/CEO of UMG, said in a statement: “Finding partners who share our passion for identifying iconic songs and recordings that will stand the test of time and deliver long-term growth is essential, which is why we are so pleased to to cooperate with Stephanos and Sam Handel and Dundee Partners. With his leadership Jody Gerson at UMPG, Nat Pastoras and JT Myers at Virgin, and the support of our experienced creatives around the world, no one can do more with music rights than our teams. We look forward to creating maximum commercial and creative value for songwriters and artists at Chord and building for the future.”

Boyd Muir, UMG Executive Vice President/CFO/President of Operations added, “We are excited to partner with the Hendel family at Chord for a number of reasons. Firstly, KKR and Dundee have built a very high quality roster that will benefit from our world-class management and global capabilities. Second, this new structure provides us with an efficient vehicle for future catalog acquisitions without significant capital allocation through a combination of leverage and partner equity. And finally, he offers us the perfect partner to approach future growth opportunistically and flexibly, someone who is equally bullish on the long-term prospects for music.”

Sam Handel, Chord managing director/co-founder of Dundee Partners, added: “We are thrilled to be partnering with Universal Music Group and embarking on this next exciting chapter for Chord. By combining a world-class financial acquisition vehicle with the world's leading music label, we are creating both a premier platform for music investment and a permanent home for the legacies of leading artists and their iconic cultural works. We would like to thank the KKR team for their partnership and building a strong foundation for Chord and its future success.”

“We are grateful to have had the opportunity to work with many leading artists and create significant value for our investors by building Chord into a diversified and scalable portfolio,” he said. Jenny Box, partner at KKR. “We believe that Dundee and UMG will drive further value creation for artists and that they share our commitment to being respected stewards of artists' music.”