In the merger of BTS’s brand HYBE and Scooter Braun’s Ithaca Holdings, Braun’s SB Projects (SBP) customer roster (which includes Justin Bieber, Ariana Grande, J Balvin and Demi Lovato) will become an important shareholder in the capital increase, which means According to a South Korean regulatory document, the agreement strengthens the ties between the two companies.
A total of 863,209 new shares were issued at a price of US$186 per share, with a total value of US$160.5 million. Of these shares, 462,380 shares were allocated to Braun himself, and 166,537 shares were allocated to Big Machine Label Group CEO Scott Borchetta. Ithaca acquired Big Machine Label Group in 2018. The $50 million pledge obtained from the purchase price was also allocated to behavior and employees. He has been working at Scooter Braun since he founded SBP in 2007. Among them, Justin Bieber (Justin Bieber) and Ariana Grande (Ariana Grande) each received 53,557 shares (about 1
At the same time, Braun’s business partner and SBP president Allison Kaye received a large number of 26,778 shares, each worth $5 million, while SBP general manager Jen McDaniels received 10,711 shares. Other long-term staff members have also received different equity interests, including Scott Manson, James Shin, Jules Ferree and Shona Ni Pu (Shauna Nep).
“Ithaca Holdings, LLC’s largest shareholder Scooter Braun and major shareholder Scott Scott Borchetta shared 25% of the proceeds from the transaction, while major artists, executives and employees (39) such as Justin Bieber and Ariana Grande received bonuses. Stocks .” Read another document related to the transaction. “We plan to participate in the increase in paid-in capital allocated to HYBE, which will be used for 100% of HYBE (a one-year protective deposit), and we hope to be more active as shareholders in the future.
The large cash plus stock transaction is a combination of major entertainment companies and is estimated to be worth more than $1 billion. As part of the transaction, Braun will become a member of HYBE’s board of directors, and Borchetta will continue to serve as CEO of Big Machine.
The agreement includes a series of services, including management, recording services and roster distribution of music artists. In terms of HYBE, it includes the Korean pop band BTS-one of the world’s largest breakthroughs in the past five years. To this end, by merging the two companies, their wisdom is that their respective advantages at both ends of the world will complement and help both partners.
People familiar with the matter pointed out that Braun is said to be in talks with former Disney executives Tom Staggs and Kevin Mayer (Kevin Mayer), they are raising funds for their SPAC, but they choose to grow up Of companies form alliances with companies like Braun. Cooperating with companies with similar music, talent and content businesses such as HYBE can provide Braun entities with operational and strategic benefits on a global scale.
As part of the $1 billion deal, HYBE must technically acquire Ithaca and in the process repurchase the minority stake held by private equity giant Carlyle Group in Ithaca.
HYBE (formerly Big Hit Entertainment) went public in October 2020 with an issue price of US$820 million, the largest scale in Korea in three years. Despite the initial hype, its share price has plummeted since then. After a sharp rise on the first day of trading, the stock sank in the last few months of 2020, and then started a dramatic rebound in late January 2021, reaching 52% above the IPO price in mid-February. A new high, with a market capitalization of US$6.4 billion.
According to the IFPI report in March, South Korea is still the fastest-growing major music market in 2020, with a year-on-year growth of 44.8%. Although the country still ranks sixth in the world’s top ten market rankings, if this rate continues to be maintained, it will definitely enter the top five soon.
According to IFPI, BTS owns the best-selling album “Map of the Soul: 7” in 2020. Since its release in February 2020, it has topped the list in the group’s home country. The record broke South Korea’s historical sales record and broke the world’s five largest music markets (the United States, Japan, the United Kingdom, Germany, and France) ).
Picture (from left): J. Balvin, Ariana Grande, Justin Bieber