BrazilDeloitte and Grant Thornton advise on deal in music scene
American music publisher Downtown Music has acquired FUGA, a Netherlands-based digital music distributor and service provider, in a move that beefs up its presence in the segment for independent artists.
Founded in 2006, FUGA’s provides content management, workflow and distribution services to more than 250 digital music service providers globally. The company, based in the Dutch capital city of Amsterdam, delivers close to 3 million tracks to some 500 distributors (including Spotify and Apple), record labels (such as Epitaph Records and Ultra Records), artist services companies, and other rights holders.
Riding high on in-demand business model and $7 million in funding, FUGA has in the past years booked strong growth and launched its first international offices. Now, by joining forces with Downtown Music Holdings, a giant in the music landscape, FUGA will be able to accelerate its ambition to nestle its way into the Asian and African markets.
“This acquisition will give FUGA the backing to achieve our global ambitions so we can continue serving the independent music community, developing our service offering and improving our technology,” said Pieter van Rijn, the CEO of FUGA.
Downtown Music serves many of the industry’s top-selling artists such as Bruce Springsteen, One Direction, Tori Amos, The Kinks, Mötley Crüe, Shaggy, Hardwell, Benny Blanco and The Beatles. “We share a common business approach and philosophy with Downtown, one rooted in providing control and flexibility for creators and rights holders,” said Van Rijn.
The acquisition of FUGA builds on Downtown Music’s March 2019 $200 million acquisition of AVL Digital Group and its subsidiaries Soundrop, AdRev, DashGo and CD Baby. The latter company is similarly to FUGA focused on helping independent artists monetise their work.
A musical merger
Commenting on the bolt-on, the CEO of Downtown Music Justin Kalifowitz said, “The exceptional team at FUGA and their unique focus on providing best-in-class capabilities has put the company at the forefront of empowering the fastest growing sector of the music industry.”
AVL CEO Tracy Maddux added; “Their robust technology, well-earned reputation for innovation on behalf of the clients they serve, and global perspective of the digital music industry are welcome additions to our existing set of capabilities and services.”
As part of the integration, FUGA’s 100 or so team members will continue to operate independently. The deal lifts Downtown Music’s headcount to over 500 across offices in New York (headquarter), Los Angeles, Nashville, London and Amsterdam.
The US-Dutch transaction – terms and conditions have not been disclosed – was supported by financial M&A advisors from Grant Thornton and Deloitte. Grant Thornton provided both tax advisory (Jurgen van Hattum, Henk Brinks, Parwesh Bissumbhar) and transaction advisory support (Wilfred van der Lee, Adam Azulai, Rick Kamper, Kim Roest), while the team of the Big Four firm (Roën Blom, Kenny Vaes, Desmond van den Bouwhuijsen, Fabian Brand) advised on transaction services.
Meanwhile, legal support was provided by Osborne Clarke (Cristine Brinkman, Cristine Brinkman, Geoffrey Beurskens, Geoffrey Beurskens, Guusje Cornelissen, Guusje Cornelissen) and deBreij (Laura Overes, Maureen Hovens).
