Round Hill Music Royalty Fund (RHM) announced that net proceeds from its investment company. The C shares have their own portfolio while the money raised by issuing them is invested. When the Board judges that the C share portfolio is sufficiently invested, the C share portfolio will be merged with the normal portfolio and the C shares converted into ordinary shares (using a formula based on their respective net asset values). The reason for doing this is to avoid the old shareholders' portfolio being diluted by a huge injection of cash and having to bear the costs of investing that cash." class="glossary_term">C-share issued in July 2021 are now fully invested and, accordingly, plans have been put in place to convert the C Shares into Ordinary actions. The calculation date of the Conversion will be April 29, 2022 and the conversion date is expected to be May 11, 2022 (on this date, transactions in the C Shares will be canceled and transactions in the new Ordinary Shares resulting from the conversion will begin) . VS Shareholders will qualify for the dividend for the period beginning April 1, 2022 following the conversion of their C Shares into new Ordinary Shares.
Following the recent deployment, RHM says its investment manager has identified a near-term pipeline of over US$120 million of investment opportunities that includes music publishing, master recordings and neighboring rights from various iconic artists, songwriters and producers. RHM Read our guide to Boards and Directors" class="glossary_term">advice say they are studying RHM options “to take advantage of these strong opportunities”.
Part C Product Deployment
In July 2021, RHM raised gross proceeds of US$86.5 million through an issuance of C shares and since then has completed a number of acquisitions using the net proceeds from the issuance of C shares. C shares as well as debt drawn from its existing revolving credit facilities (RCF). To clarify, as of February 10, 2022, RHM has used approximately $86.5 million, or 100%. of the net proceeds from the issuance of C shares and had drawn approximately US$91.7 million under its existing RCF. Details of specific acquisitions are provided below, but RHM advises that acquisitions have the following characteristics:
- Vested at a three-year average historical Net Publisher Share (“NPS”) multiple of 17.9x;
- more than 77 percent. income generated relates to compositions written between 1950 and 2010;
- more than 5,600 musical compositions;
- Rock comprises about 90 percent. Copyrights acquired with the proceeds of the Issue of C Shares and the debt taken from the RCF. Following these acquisitions, the Company continues to have a truly diversified offering wallet in terms of genre: Rock (about 54%); Country (about 10%); Pop (about 18 percent.); Classical R&B (around 6%) and others (around 12%)1; and
- diversified in terms of revenue type: performing (about 25 percent), master recordings (about 50 percent), synchronization (about 5 percent), mechanics (about 8 percent) and other (about 12 percent). .).
RHM acquisitions include:
- On August 11, 2021, the company announced the acquisition of the publishing catalog of prolific film score composer and Yes guitarist Trevor Rabin. The acquisition included 3,528 Rabin film lines and songs.
- On September 9, 2021, the company announced the acquisition of 100% master royalty rights to Foreigner’s first seven albums from Dennis Elliott, the rock band’s original drummer.
- On September 15, 2021, the company announced the acquisition of recorded music revenue and publishing rights to a catalog of 30 songs by Tim Palmer, providing exposure to Pearl Jam and Ozzy Osbourne.
- On September 28, 2021, RHM announced the acquisition of master royalty income from 532 original recordings from The O’Jays.
- On November 2, 2021, the Company entered into a long-term agreement to administer 100% of neighboring rights revenue, generated from the master recordings, of three longtime members of British rock band Supertramp.
- On December 29, 2021, the Company announced that it had acquired a significant share of the publishing rights of Niko Moon, the American country singer-songwriter.
- On December 31, 2021, the Board of Directors announced that the Company had acquired the master recordings and music publishing assets of American reggae band Rebelution.
- On December 31, 2021, the Company announced that it had acquired 100% of a catalog of 308 titles from Richardson, Jack and his son Garth, consisting of producer royalties and neighboring rights revenue on timeless classic titles.
- On January 5, 2022, the Company announced the acquisition of a significant portion of the lead artist’s royalties and entered into a long-term agreement to administer neighboring rights revenue from the catalog of Nancy Wilson, singer, songwriter and guitarist acclaimed Rock ‘n’ Heart Hall of Fame band.
- On January 14, 2022, the company announced the acquisition of music publishing, master rights and master rights royalties for, and entered into a long-term administration agreement for neighboring rights revenue from the catalog of legendary Whitesnake frontman and 1973-76 Deep Purple singer David Coverdale.
- On February 8, 2022, the board announced that the company had acquired a significant majority of the rights to a legendary influential American rock band. The acquisition covers publishing, masters and neighboring rights of the group.
Comments from Trevor Bowen, President of the Round Hill Music Royalty Fund
“We are delighted to announce the successful completion of the company’s deployment from the recent C-share issuance in eleven high-quality catalogs with many well-known songs, and to provide further information on the quality of these purchases. Reflecting the company’s broader portfolio and investment philosophy of favoring catalogs with proven long-term revenue streams above 77%. of the revenue generated relates to compositions written between 1950 and 2010. Looking ahead, the investment manager’s pipeline is significant and we look forward to further updating shareholders in due course.
Comments from Josh Gruss, Chairman and CEO of Round Hill, RHM Investment Manager
“It’s fantastic to have had the opportunity to acquire so many high-quality catalogs for the company with the proceeds from the C-share issue, giving our investors access to over 20 top-tier catalogs.and and 21st artists of the century including Pearl Jam, Ozzy Osbourne, The O’Jays, Supertramp, Zac Brown Band, Nickelback, Avicii, Rebelution, Alice Cooper, Deep Purple, Yes, Foreigner, Bob Seger, Rage Against the Machine, Chevelle, Rise Against, Trapt, Mudvayne, Heart and Whitesnake.
As expected, recent acquisitions significantly increase the Company’s diversified portfolio weighting in rock music. Rock is a genre that we believe has one of the most compelling fundamentals for successfully investing in long-term music royalty with an ever more loyal fan base and music that is often more enduring than other genres.
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