French music-streaming company Deezer plans to go public by merging with a Spac backed by billionaire Francois Pinault’s investment group and investment banker Matthieu Pigasse.
The deal values the streaming service at €1.05 billion and comes as music companies like Spotify and Universal have tried to capitalize on the streaming music boom with public offerings in recent years.
Deezer merges with I2PO, a Paris-listed special purpose acquisition company sponsored by several prominent French banking and media figures.
French billionaire Pinault family backed the blank check venture through their Artemis investment arm, along with Iris Knobloch, director at Lazard and former president of WarnerMedia in France and Germany, and Pigasse, head of Centerview Partners in France.
François-Henri Pinault, son of French billionaire Francois Pinault and founder of the luxury group Kering, represents the family on the board. punk rock fan and co-owner of the newspaper Le Monde, Pigasse was before him head of Lazard France joined Centerview in 2020.
The Spac deal has 135 million euros in the form of pipe funding and a non-redemption agreement, in which investors agree not to withdraw their funds from the deal, from Deezer’s existing investors, which include Universal Music Group, Warner Music and Orange, introduced.
Investors’ appetite for spac deals has dried up significantly in recent months, and blank check teams have been forced to do so sweeten the terms offered to investors to minimize the number of withdrawals. Investors in blank check vehicles who don’t like the merger target are able to withdraw their funds, and skyrocketing withdrawals have caused several deals to fail.
With 9.6 million paid subscribers compared to Spotify’s 180 million, Deezer is a small player in the music streaming market, where it competes with some of the biggest tech companies in the world. According to research group Midia, Deezer accounted for about 2 percent of global music streaming subscribers last year, compared to Spotify’s 31 percent, Apple’s 15 percent and Amazon’s 13 percent.
Deezer attempted to go public via an IPO in 2015, but ultimately scrapped the plans.
In 2015, streaming generated $2.8 billion in revenue for the global recorded music industry, but that figure rose to $16.9 billion last year, according to IFPI, a trade group. Total recorded revenue grew to $25.9 billion last year, an 18 percent increase from 2020.
Some of the world’s last music companies — including industry leader Universal Music — have also gone public in recent years to capitalize on the jump in sales.
Billionaire Len Blavatnik, who has already been handsomely rewarded by betting on the revival of the music industry, will also benefit from the listing of Deezer, which he majority owns through his holding company Access Industries. Blavatnik bought Warner in 2011 for $3.3 billion, and the company is now publicly traded at a $17.9 billion valuation.
French music streaming group Deezer to go public via Spac deal Source link French music streaming group Deezer to go public via Spac deal