Reservoir Media has become the latest music company to go public, in its case via a ‘spac’ merger with a company called Roth CH Acquisition II Co. The merger closed on 28 July, and yesterday was thus the new entity’s first day of public trading on the Nasdaq stock exchange.
How did that go? Well, the company began trading at $9.49 in the morning, and closed at $9.03 according to Billboard, so its share price fell by 4.8%. Not a rocket of a start to life as a public company then, but as with similar moves (Hipgnosis, Round Hill etc) this is a much longer-term play.
Even ahead of this week, Reservoir has been busy recently. In June, it acquired storied hip-hop label Tommy Boy Music, while earlier this month it took a stake in music firm Outdustry, including creating a joint venture to acquire catalogues in China.
As a public company, we can expect quarterly news on Reservoir’s business now. Its investor presentation offers the most recent stats, including predicted annual revenues of $80m in its 2021 fiscal year (which ended in March) and $104m for 2022.
Reservoir now has a catalogue of more than 130k publishing copyrights and 26k sound recordings, and the document offers some useful insight into the dealmaking around this. In its 2020 fiscal year, the company made 77 offers for catalogues, ultimately closing 39 of them. Reservoir says it has more than 200 M&A targets in its current pipeline, worth more than $600m.
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