Late last month, reports suggested that New York City-based music publisher Reservoir Media was preparing to go public by merging with blank-check acquisition company Roth CH Acquisition II (ROCC on NASDAQ). Now, the parties have officially set the process in motion by inking a “definitive agreement.”
Reservoir Media announced today that it and Roth CH Acquisition II, a blank-check acquisition company that’s operated by Roth Capital and Minneapolis-based Craig-Hallum Capital Group, had finalized a deal for the merger. Roth CH Acquisition II raised $115 million via a December of 2020 IPO, and once this merger formally closes, the combined entity will operate as Reservoir Media, under the ticker RSVR on NASDAQ.
The boards of Reservoir Media and the roughly four-month-old acquisition company unanimously approved the deal, and the businesses generated $150 million from institutional investors via a common-stock PIPE that priced shares at $10 apiece. Moreover, the merger “implies a pro forma enterprise valuation” of $788 million, and Reservoir is expected to bring in $246 million in cash, per the release.
Finally, in terms of the agreement’s nuances, the involved entities anticipate that the merger will close sometime in 2021’s third quarter, with Reservoir Media founder Golnar Khosrowshahi remaining on as CEO.
The 14-year-old Reservoir represents north of 130,000 copyrights and 26,000 masters, including stakes in works from John Denver, Lady Gaga, Bruno Mars, and others on the publishing side. Also included in the company’s holdings are the rights to more than 150 film scores, multiple efforts from famed composer Hans Zimmer among them. And besides its New York City headquarters, the company has offices in Nashville, Toronto, London, and Abu Dhabi.
Though 2020 brought all manner of multimillion-dollar deals in the music IP space, creators have continued to sell their catalogs for massive windfalls in the new year. Two weeks ago, Sony Music Publishing (formerly Sony/ATV) bought Paul Simon’s entire catalog, including his interest in hits such as “Mrs. Robinson” and “The Boxer.”
Separately, music-focused special purpose acquisition companies – like that which Reservoir Media will merge with – have continued to crop up. Anghami, the leading music streaming service in North Africa and the Middle East, is preparing to list shares on NASDAQ by merging with the Vistas Media Acquisition Company (traded as VMAC).
SiriusXM majority owner Liberty Media kicked off 2021 with a half-billion-dollar IPO for its special purpose acquisition company, which a Neil Jacobson-led blank-check company followed with a $200 million IPO in February.