Beverly Hills-based Virgin Music Group on Monday said it will acquire Downtown Music Holdings for $775 million, boosting its capabilities in the independent music industry.
Virgin Music Group, the independent-music division of Universal Music Group, said the acquisition of the New York-based publishing and royalties company will bring a “broadened and enhanced suite of services to clients,” including in areas such as physical and digital distribution, business intelligence and royalties and rights management.
“It´s an exciting time for Virgin as we continue to build a next-generation music company for independent artists and labels,” said Nat Pastor, co-CEO of Virgin Music Group, in a statement. “We aren’t just making an acquisition; this is an investment into the global independent music ecosystem and a commitment to nurture current and future creators and entrepreneurs with world-class support, services, and capabilities they require at any phase of their careers.”
Downtown Music represents more than 50 million songs and 4 million creators in at least 145 countries. Core divisions of the company, which has about 600 employees globally, include publishing, distribution, artist and label services, as well as royalties and financial services, according to its website.
Justin Kalifowitz, founder of Downtown Music Holdings, said he believes the service his company provides to clients will be strengthened by working with the Virgin Music team.
“This is a tremendous recognition of the importance and vitality of independent music, and the value that our company brings to its clients every day,” Kalifowitz said in a statement. “Downtown was established with the belief that artists and entrepreneurs everywhere and at every stage are entitled to the same tools and opportunities to succeed.”
The deal is expected to close in the second half of next year. Virgin and Downtown Music spokespeople did not immediately respond to questions. .
The acquisition is the latest sign of consolidation in the music industry, raising concern among some critics.
“It is vital to uphold a true choice of partners for artists and labels and ensure that negotiating power does not become unbalanced,” Gee Davy, CEO of the Assn. of Independent Music, told Variety. “Only in this way can homegrown artists and businesses access fair deals, investment and growth.”
