Cutting Edge Group secures $500m to fund music rights acquisitions

Cutting Edge Group has completed a $500 million debt refinancing with a consortium of four banks led by U.S.-based Fifth Third Bank and Toronto-based private investment firm, Northleaf Capital Partners leads the way.

According to an announcement from UK-based Cutting Edge today (April 15), the new funds will be used for a combination of “corporate purposes” and the acquisition of music rights across major platforms. film, television, theater, gaming and healthcare.

Cutting Edge said it has identified “a potential investment pipeline worth approximately $1.5 billion.” The Financial Times reported on Monday morning that those transactions “may be further funded by attracting third-party investors.”

Founded in 2006, London-based Cutting Edge has been a prominent film and TV music rights company over the past few years.

In 2022, it Cooperation with affiliates of London-based Blantyre Capital in a secured agreement 125 million USD to acquire music publishing rights from composers who write music for film and television.

In February last year, Cutting Edge guaranteed other 100 million USD from banks led by Nashville-based Pinnacle Financial Partners.

We've written about Toronto-based Northleaf Capital Partners before, such as in 2021, when Spirit Music Group owner Lyric Capital Group landed $500 million. strategic alliance with Northleaf.

Since that deal, Northleaf has used Spirit Music Group's music assets to support salary increases in a bond offering worth $303.8 million.

Additionally, in February, music sponsorship platform Duetti guaranteed One 75 million USD credit facility from Northleaf Capital Partners.

In a separate place Notification on Monday, Northleaf Capital Partners revealed that it acted as lead arranger of one 100 million USD asset-backed second lien credit facility for Cutting Edge Corporation. In other words, $100 million of the $500 million total is guaranteed across the organization.

“Northleaf's investment in Cutting Edge fits well with our asset-based specialty financing strategy that seeks to provide providing our investors with diversified exposure and low correlation.” “This investment is an attractive addition to our investors' portfolios.”

CEG's catalog includes more than 2,000 titles across soundtrack albums, publishing assets and royalty income streams.

The company's portfolio includes music that has appeared in film, television, theater productions and video games including John Wick, Elf, Star Trek: Discovery, The Jungle Book, The Office, South Park , NCIS: Los Angeles, The Morning Show, Stranger Things , The Crown, Suits, The Walking Dead, Bridgerton, Ted Lasso, Glee, Aquaman, Drive, Matilda: The Musical, Cyberpunk 2077 and Assassin's Creed Valhalla.

In 2019, CEG expanded into what it called the “rapidly growing wellness music category,” focusing on acquiring music rights that it said “generates an income stream Stable, recurring recordings and compositions are used to improve health and physical outcomes such as sleep, concentration and memory.

Since then, they said, they have “assembled a significant portfolio of more than 75 active musicians and artists, generating “several billion streams,” including Liquid Mind, 2002 award-winning, Bernward Koch and Peter Kater”.

CEG noted on Monday that “wellness music is quickly becoming a prominent genre across DSPs such as Spotify And Amazon Music“.

The company added that it “has identified a series of off-platform opportunities to aggressively maximize the potential of its portfolio.”

“Thanks to our early confidence in this very specific market sector, Cutting Edge has become the world's leading music partner for the film and television industry.”

Philip Moross, Advanced Corporation

Philip Moross, CEO of Cutting Edge Group, said: “Thanks to our initial belief in this very specific sector of the market, Cutting Edge has become the world's leading music partner for the industry. film and television industry.

“During that time, the structural trends driving our industries have accelerated exponentially, bringing rapid growth in digital platforms and content, tailored to consumer needs. The use of music media is increasing.

“Before the pandemic, we identified a similar opportunity in the global healthcare market, which is now predicted to grow 10% annually to a $7 trillion market by 2025. This recapitalization will enable us to execute on our growth strategy to take full advantage of these trends in our usual disciplined manner.”

“Working with our new finance partners, we are pleased to now be able to continue our defined roadmap, expand our portfolio and continue to support this sector of the industry. ”

Tim Hegarty, breakthrough

Tim Hegarty, Director of M&A and Corporate Strategy at Cutting Edge Group, added: “Working with our new financial partners, we are now pleased to be able to continue on our defined roadmap, opening widen its portfolio and continue to support this area of ​​the industry. .”

“Cutting Edge Group has an outstanding track record of royalties and licensing, and has amassed a compelling catalog of tracks and song titles since its inception.”

C.J. Wei, Bac Leaf

CJ Wei, Director, Private Credit at Northleaf, said: “Cutting Edge Group has an outstanding track record in royalties and licensing, and has amassed a compelling catalog of tracks and song titles that tell since its inception.

“We are delighted to bring our expertise to the table and partner with them to support the company's strategic growth at a time of strong worldwide demand for streaming music content. line.”

“Fifth Third is honored to have the opportunity to work with Cutting Edge and Philip Moross.”

Jeff Bazoian, Third Thursday

“Fifth Third is honored to have the opportunity to work with Cutting Edge and Philip Moross,” said Jeff Bazoian, Head of Investment Banking and Corporate Media & Entertainment at Fifth Third.

“It's exciting to work with customers who have long-term relationships. We are also grateful to our financial partners including Pinnacle, Regions and MUFG. We look forward to being part of the next step in Cutting Edge’s evolution.”

In May 2023, Cutting Edge entered the world of pop music, reach an agreement with renowned songwriter and producer Jamie Hartman, who has written or co-written hits for artists such as Lewis Capaldi, Celeste, Calvin Harris, Rag'n'Bone Man and the Backstreet Boys, among many others .

In February last year, the company announced a new joint venture with Village Roadshow Entertainment Group, parent company of Village Roadshow Pictures and Village Roadshow Television.

The deal includes all of VREG's past and future music publishing assets, soundtrack album releases and music supervision services, as well as VREG's music assets for film, television and television. scripted and unscripted images.

Among Cutting Edge's recent transactions is the acquisition of “Large soundtrack catalog” from First Score Music Ltd. based in the UK, including full publishing and master rights to over 75 “deluxe” soundtracks. Terms of the deal were not disclosed, but a source told MBW the deal is worth seven figures.Music business worldwide