Private equity firms Apax Partners and Ingenious Ventures have backed a £40 million funding round at Stage Three Music, a music publishing business. Stage Three will use the capital to add songwriters to its books and buy song catalogues.
Stage Three is run by managing director Steve Lewis, the former chief executive of Chrysalis Group’s music division and head of Virgin Music (Publishers) for nine years. He said: “Stage Three will now be able to make acquisitions that were previously beyond our reach. We will creatively and aggressively seek to add value to our copyrights and develop the careers of our songwriters.”
The firm acquires copyrights from individual songwriters and rolls up independent music publishing catalogues into a single coherent catalogue. The catalogue currently contains songs that have been recorded by artists such as Eric Clapton, BB King and Tears for Fears.
In May 2004, Stage Three acquired NewKastle, a country music catalogue of around 600 songs, and earlier this month signed an exclusive songwriting agreement with Shellie McErlaine, former member of pop band Alisha’s Attic.
“Music publishing is a highly attractive segment of the music industry for investors,” said Paul Fitzsimons, partner at Apax Partners Worldwide. “Stable underlying revenues are complemented by significant opportunities in new areas of music consumption, such as legitimate downloads and ringtones.”
Apax Partners, which is currently raising a €4.5 billion sixth European fund, has made a number of recent investments in the media sector including directories businesses Yell and Thomson Directories and Virgin Radio.
Ingenious Ventures is the private equity division of Ingenious Media, the London-based specialist media and entertainment investment and advisory group. The firm’s investments include 19 Entertainment, creator of the Pop Idol television format.