This South Korean Billionaire’s US Arm To Acquire Scooter Braun-Led Firm For $1B
South Korean conglomerate HYBE Co Ltd behind Grammy-nominated K-Pop phenomenon BTS has entered a $1.05 billion to purchase American music executive Scooter Braun’s company Ithaca Holdings.
Acquisition details
- Through its US unit HYBE America, billionaire Bang Si-Hyuk’s behemoth—formerly known as Big Hit Entertainment—will take full ownership in the US-based holding company and its properties, that includes SB Projects and Big Machine Label Group, the companies said in a joint statement.
- As per AFP, HYBE is said to invest $950 million in its US unit to purchase Ithaca Holdings—led by Braun who manages some of pop-culture’s biggest names like Ariana Grande and Justin Bieber—while a separate filing in Seoul showed that its wholly-owned subsidiary will pay $1.05 billion to creditors and others.
- HYBE revealed in a second regulatory filing that it would issue new shares worth $161 million to be distributed to Bieber, Braun, Grande, among others, according to Reuters.
- Braun will, therefore, join HYBE’s board, while Scott Borchetta will remain CEO of Big Machine Label Group.
- In addition to BTS, the merger will bring together musicians like Tori Kelly, Grande, J Balvin, Demi Lovato and HYBE’s K-Pop artists such as Zico, Gfriend, and Seventeen, under one roof for management, label services and publishing.
- The statement also mentioned that their top-tier artists will participate in HYBE’s capital increase to further strengthen the ties between both firms.
- HYBE Chairman and CEO said that both entities would closely work “leveraging our proven track records of success, know-how, and expertise to create synergy, transcend borders and break down cultural barriers.”
- Under the agreement, private equity company The Carlyle Group will sell its “significant minority stake” in Ithaca Holdings. In 2017, it invested in the firm by way of its Carlyle Partners VI fund, the statement said.
- The new joint-venture record label comes weeks after Universal Music Group and the South Korean agency announced a joint label, in partnership with UMG’s Geffen Records.
Crucial quote
“This will be the first time HYBE’s groundbreaking systems and curation will be integrated in the US market at the onset of an artist’s career. Plus, it will help us to continue to further the careers of the artists we already work with,” Braun said in a statement.
“Global opportunities for artists become exponential with this partnership. This is an opportunity for us to make history and further innovate the music industry and revolutionize the game itself. Its implications for the business will be monumentous for a long time to come. I am incredibly grateful for Chairman Bang’s friendship and his willingness to support the creative journey of an artist.”
Meet the billionaire
Bang founded the then-called Big Hit Entertainment in 2005, before growing to establish itself as one of the country’s largest music labels and entertainment agencies. He worked as a composer for one of South Korea’s ‘Big Three” music agencies JYP Entertainment prior to his company’s launch.
The 48-year-old’s real-time net worth is pegged at $2.7 billion as of April 2, 2021, according to Forbes.
His firm’s success was largely attributed to the K-Pop septet BTS, who’ve scored three No. 1 albums on the US Billboard 200 and grabbed a Grammy nomination this year. The chart-toppers were the 47th world’s highest-paid celebrities, earning $50 million last year, as per Forbes’ ‘Celebrity 100 2020’ list.
In October 2020, Bang took his company public on the KOSPI Market of Korea Exchange (KRX), marking the country’s largest initial public offering (IPO) in three years. This has made him a billionaire.
Main image by SeongJoon Cho / POOL / AFP.
Original article from Forbes Middle East