Primary Wave said on Monday (March 23) it is acquiring Kobalt’s worldwide operations, its catalog of owned copyrights and digital collection company amra, according to a press release.
Terms of the deal, which is subject to regulatory approval and expected to close in the latter half of 2026, were not disclosed. Billboard reported in February Kobalt’s majority owners Francisco Partners and minority owners Dundee Partners, Kobalt co-founder and CEO Willard Ahdritz and MUSIC’s Matt Pincus were in talks to sell the company for a price sources said could top $1.5 billion.
Kobalt would operate as a stand-alone company, according to the statement, while Primary would benefit from Kobalt’s publishing administration and digital collections platform amra. AMRA collects mechanical and performance royalties directly from digital service providers, which could allow Primary Wave to improve its profitability by cutting out the service fees that are paid to local collection societies and sub-publishers on its existing music publishing portfolio.
Primary Wave’s extensive portfolio includes stakes in the iconic catalog of artists such as Prince, Whitney Houston and Bob Marley, and is worth nearly $6 billion.
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In a statement announcing the acquisition, Primary Wave Music CEO and founder Larry Mestel said Kobalt CEO Laurent Hubert and his management team would continue leading Kobalt’s pledge to be transparent and “creator first.”
“Over the many years Laurent and I have known each other, I have always been impressed by the remarkable team he has built, as well as the extraordinary growth Kobalt has experienced under his leadership,” said Mestel. “This acquisition will only enhance his efforts to provide creators individualized attention and specialized support at every stage of their journey and to provide a very significant amount of capital to Kobalt for continued growth.”
Francisco Partners acquired around 90% of Kobalt in 2022 in a deal that reportedly valued Kobalt at $750 million. One year later, Kobalt partnered with Morgan Stanley’s Tactical Value group to launch a joint venture with $700 million to invest in music copyrights.
The statement released Monday did not disclose whether the music assets Kobalt purchased with Morgan Stanley, which include certain rights related to the catalogs of *NSYNC and AJR, are included in the deal with Primary Wave.
“Primary Wave understands our vision of independence … service, technology and creativity,” Hubert said in a statement. “[They] are true champions of the music community, and their support underscores the value of the independent ecosystem we are all building. Clients can remain confident that our mission and leadership remain entirely focused on their success.”
Sources tell Billboard the deal could be worth more than $1.5 billion because Kobalt has annually generated about $90 million in earnings before interest, taxes depreciation and amortization. Kobalt’s most recent financial filings, for the year ending June 30, 2024, reflect a profit loss of $30.24 million on $794.4 million in revenue compared to the prior fiscal year, when it had $13.1 million in profit on revenue of $522 million, according to its filings with the U.K.’s Companies House. Sources familiar with the company’s financials say when examined under U.S. accounting principles and considering for EBITDA, Kobalt’s financial picture is stronger.
Goldman Sachs & Co. LLC served as financial advisor.
