Acquisition Minority Interest in RH Carlin Hldgs

LEI: 213800752UO1CJTV8C39

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4 May 2021

ROUND HILL MUSIC ROYALTY FUND LIMITED

("RHM" or the "Company")

Acquisition of a Minority Interest in RH Carlin Holdings LLC

and

New Revolving Credit Facility

The Board of Round Hill Music Royalty Fund Limited is pleased to announce that it has acquired the 29.14 per cent. share in RH Carlin Holdings LLC ("Carlin") (the "Second Investment") that was previously owned by Round Hill Fund One. As such, RHM has successfully acquired all of the Identified Pipeline as outlined in the Company's prospectus published on 19 October 2020 (the "Prospectus").

The consideration paid by the Company in connection with the acquisition of the Second Investment reflects the underlying valuation of the Copyrights owned by Carlin as of 30 June 2020. All income from the Copyrights attributable to the Company, in relation to its shareholding in Carlin, will accrue to the Company from 1 April 2021. Following the acquisition of the Second Investment, the Company has fully invested the capital raised in the IPO and subsequent placing. 

Revolving Credit Facility 

The Board is also pleased to announce that RHM has entered into a new revolving credit facility (the "RCF"), provided by Truist Securities, Inc. ("Truist"). The RCF allows the Company to borrow up to 25 per cent. of Economic NAV^[1], calculated at the point of draw down. The RCF has been utilised to part finance the Second Investment, and the remainder may be used to acquire future pipeline opportunities.

Carlin

The history of Carlin is legendary within the music publishing industry. 

Carlin was a family-owned business started in the 1960s by Freddy Bienstock, an American music publisher, who built his career in music by being the person responsible for requesting and selecting songs for Elvis Presley's early albums and films.

In 1966 Freddy Bienstock acquired Belinda Music Publishing, which he renamed Carlin Music Corporation after his daughter, Caroline. This company became the basis for many further music publishing acquisitions, building the firm's catalogue to 100,000 songs. He soon expanded the Carlin Music catalogue by associations with such hit makers as Leiber & Stoller, in addition to representing Atlantic Records and Motown Records. Carlin was then named Publisher of the Year by Music Week for ten consecutive years.

In partnership with Leiber & Stoller, Bienstock later formed Hudson Bay Music, as the publisher's American business. Located in New York City on the top floor of the legendary Broadway landmark Brill Building, Hudson Bay rapidly acquired such major assets as the TM Music and Faithful Virtue Music catalogues, whose artists included Bobby Darin, Tim Hardin and John Sebastian, and the label and publishing divisions of Starday and King Records. His holdings were further enlarged by the acquisitions of the music publishing interests of The New York Times, the pre-eminent Broadway show catalogue of its era, with scores such as "Company", "Follies" and "Godspell", and hits by songwriters Peter Allen, Marvin Hamlisch and Carole Bayer Sager.

After his partnership with Leiber & Stoller ended in 1980, Bienstock, along with the estates of Rodgers and Hammerstein, acquired Edward B. Marks Music Co., whose songwriters included George M. Cohan, Billie Holiday, Ernesto Lecuona and Jim Steinman, in addition to composers such as William Bolcom, Norman Dello Joio and Roger Session.

Carlin's underlying portfolio comprises over 100,000 Copyrights that span multiple decades of popular music history across many genres from jazz, country, pop, rock and dance, including classics made famous by artists such as Johnny Cash, Aretha Franklin, Ella Fitzgerald, Meatloaf, Air Supply, Bonnie Tyler, Elvis Presley, Peggy Lee and George Harrison,

The portfolio includes timeless classic songs such as "What A Wonderful World", "Total Eclipse of The Heart", "Happy Together", "Under the Boardwalk", "Fever", "Are You Lonesome Tonight", "Got My Mind Set On You", "Sea Of Love" and many more. A large number of Carlin's compositions have featured in motion pictures and Carlin also publishes the scores to many well-known and much-loved stage musicals, such as "Fiddler on the Roof" and "Cabaret".

Artists as diverse as David Bowie, Bruce Springsteen, Shania Twain, Simply Red, Norah Jones, Joss Stone, Erasure, Primal Scream, The Pussycat Dolls, The Thrills, Katie Melua, Barbra Streisand, Jet, Kylie Minogue, The White Stripes, Heather Small, Rihanna, Rod Stewart, Robbie Williams, Bryan Ferry, Guns N Roses, Five Finger Death Punch, The Feeling, Jamie Cullum, Robert Plant, Michael Bublé and Adele have chosen to record material from Carlin's catalogue.

In addition, DJ Paul Oakenfold, Sean Paul, Belle & Sebastian, Jennifer Lopez, Kanye West, Mylo, Girls Aloud, Lily Allen, Faithless, R Kelly, Gwen Stefani, 50 Cent, Cheryl Cole, Estelle, Mark Ronson, Massive Attack, Amy Winehouse, Take That, Will.i.am, Bruno Mars, Jessie J and The Who, among many others, have all sampled Carlin compositions on respective hit singles which demonstrates the variety and timelessness of Carlin's catalogue.

Round Hill Music Royalty Fund II LP and its associated investment vehicle will continue to own 70.86 per cent. of Carlin.

Dividend

Following the completion of this transaction, the Company anticipates paying to Shareholders the stated annualised dividend of 4.5 per cent.

Dividend Timetable

Commenting on the acquisition, Trevor Bowen, Chair of the Company said:

"I am delighted to announce that the Company has acquired the Second Investment, which comprises a catalogue of exceptional songs including timeless classic tracks from some of the world's best-known songwriters and artists. The Board is pleased that the proceeds raised at IPO and the subsequent placing have been fully deployed within the anticipated timeline as outlined in the Prospectus. We now look forward to working with Round Hill, and using the RCF, to take advantage of the strong existing pipeline of high-quality songs and catalogues available for additional acquisitions, for the benefit of Shareholders."

Josh Gruss, CEO of Round Hill commented:

"All of the team at Round Hill are thrilled that the Company has acquired the 29.14 per cent. interest in the Carlin Copyrights previously owned by Round Hill Fund One. The Carlin Catalogue is, in our view, one of the highest quality collections of diverse music copyrights ever assembled and we are delighted to have been able to acquire this significant stake for the benefit of the RHM shareholders. We can now turn our attention to our substantial pipeline of new investment opportunities, where we continue to see a large amount of exciting and high-quality Catalogues for the Company to acquire."

The Company was represented by Nick Heather of Gowling WLG (UK) LLP and Jeff Biederman, Veronica Lah and Christopher Dayans of Manatt, Phelps & Phillips, LLP in the transaction. Michael Selverne of Selverne & Company, PLLC and Richard Heinle and Adi Rappoport of Gunster represented Round Hill Fund One.

FOR FURTHER INFORMATION

Notes: 

Unless the context otherwise requires, capitalised terms used in this announcement have the meanings in the Prospectus.

The Company is a recently incorporated non-cellular Guernsey company. The Company's Investment Objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property. In order to achieve its Investment Objective the Company will invest in a songwriter's copyright interest in a musical composition or song (being their writer's share, their publisher's share and their performance rights) together with the rights in the recording of the musical composition or song (known as the master recording rights) together with all such rights and assets considered by its investment manager, Round Hill Music LP ("Round Hill") to be ancillary thereto. 

Founded in 2010, Round Hill is a fully integrated owner and operator of music copyright properties and the sixth largest music publishing company in the US. Headquartered in New York with additional offices in Nashville, Los Angeles and London, Round Hill has an experienced management and investment team with an established reputation and extensive experience in the music and finance industries.