HYBE, the music firm behind Ok-pop superstars BTS and rising stars New Denims, is trying to elevate round 500 billion Korean gained (approx USD $380m) to fund acquisitions within the US.
That’s in line with Bloomberg, which, citing individuals conversant in the matter, stories that the South Korean leisure big “is in talks with buyers to safe fairness financing”.
The report provides, citing those self same individuals, that HYBE “is open to having each strategic and monetary companions”.
HYBE chairman Bang Si-Hyuk has been vocal this 12 months about his firm’s ambitions to increase its international presence through M&A and diversify its sphere of affect past Ok-Pop within the international music enterprise.
In March, he defined his firm’s US M&A technique in an interview with CNN, noting that “globally, [K-pop] shouldn’t be occupying a lot of the market”.
He added: “However, Latin music and afrobeats may be very quickly rising. So being the place we’re, it’s extra pressing to extend the publicity. For that objective, I’m taking up labels and administration firms in America to have the ability to construct the infrastructure.”
HYBE’s USD $1 billion-plus acquisition of Scooter Braun’s US-based Ithaca Holdings in 2021 introduced numerous profitable non-Ok-pop operations into HYBE (through HYBE America).
These included nation music big, Massive Machine Label Group, plus Braun’s personal administration firm, SB Tasks (dwelling to Justin Bieber and Ariana Grande).
In February, HYBE secured one more foothold within the US leisure enterprise when HYBE America, led by Braun, acquired Atlanta rap powerhouse QC Media Holdings or High quality Management, dwelling to acts comparable to Lil Child, Migos, Lil Yachty and Metropolis Women.
The deal was price $300 million in complete, in line with Korean regulator filings – with $250 million of that determine paid in money, and the remaining in HYBE inventory. (Raine Group is known to have priced QC.)
That acquisition arrived as a bidding warfare broke out between HYBE and South Korea’s Kakao Leisure for rival Ok-pop firm, SM Leisure.
In February HYBE acquired a 14.8% stake in SM Leisure, for round USD $335 million, through the acquisition of shares from Lee Soo-man, SM Leisure’s estranged founder.
HYBE deliberate to amass a 40% stake in SM Leisure, however formally ended its takeover bid on March 12. Kakao Corp. is now the biggest shareholder in SM Leisure. Bloomberg stories that HYBE nonetheless owns round an 8.95% stake in SM.
Though HYBE didn’t take management of its rival, it did handle to increase its attain to followers of SM Leisure artists through the addition of the latter firm’s artists to its Weverse superfan platform.
SM’s artists – which embody acts comparable to EXO, Women Technology, Crimson Velvet and aespa – will transfer onto the Weverse platform later this 12 months.
Common Music Group artists have additionally beforehand joined the app. (UMG has inked multi-territory distribution and advertising and marketing partnerships with HYBE, together with one for BTS, up to now two years.)
Weverse varieties a key a part of HYBE’s international technique. The corporate revealed in its Q1 investor presentation that it plans to launch a subscription-based membership tier on the app in Q3 2023. Weverse’s Month-to-month Lively Customers grew 10% in Q1 versus This fall 2022 to 9.3 million MAUs.
HYBE’s US M&A technique additionally varieties a part of a broader imaginative and prescient to compete with the world’s largest report firms throughout a number of genres with a multi-label system harking back to the standard main label construction.
HYBE CEO Jiwon Park wasn’t shy in declaring this ambition again in February in an open letter confirming HYBE’s acquisition of a 14.8% stake in its rival SM Leisure.
“Ok-pop flourished in an surroundings the place we may problem ourselves,” he wrote on the time. “We must always preserve the bottom in order that we will stand shoulder-to-shoulder with the world’s main report labels.”
Park additionally expanded on HYBE’s “multi-label construction” technique in a separate letter to shareholders in October final 12 months when he detailed a plan to melt the blow of the hiatus of its flagship Ok-Pop group BTS, who’ve, traditionally been its largest earner.
“WE ARE LOOKING TO [MERGE WITH/ACQUIRE] VARIOUS LABELS, MANAGEMENT [FIRMS] AND ANY OTHER COMPANIES THAT PURSUE BUSINESSES RELATED TO MUSICAL INTELLECTUAL PROPERTY.”
HYBE STATEMENT, NOVEMBER 2022
This concept was further fleshed out by HYBE for its buyers a month later (November 2022), with the corporate telling shareholders that it was actively and strategically “trying to M&As and establishing joint ventures in order that we might increase on our multi-label construction each in and outdoors of Korea”.
Added HYBE: “We wish to [merge with/acquire] numerous labels, administration [firms] and some other firms that pursue companies associated to musical mental property.”
On the difficulty of BTS’s absence, HYBE’s Q1 monetary outcomes supplied sturdy proof that the corporate is ready to generate vital revenues within the absence of an lively schedule from the celebrity group.
Gross sales of albums launched by HYBE artists in Q1 grew by a whopping 185.1% YoY to 184.28 billion South Korea Gained ($137.4m).
Plus, HYBE act Seventeen’s album FML racked up 4.64 million preorders, making it the most-preordered Ok-Pop album of all time, beating a report set by BTS in 2020. Their Map of the Soul: 7 obtained 4.02 million pre-orders.Music Enterprise Worldwide