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“This must be taken over.”
At the end of last year, the news that Scooter Brown, a big player in the global entertainment industry, is selling Ithaka Holdings, which has a management company SB project, was delivered to Hive (formerly Big Hit Entertainment). There are already candidates for acquisition. However, Hive founder Chairman Bang Si-hyuk said, “We have to buy” without hesitation. Immediately, a team dedicated to mergers and acquisitions (M&A) was formed within Hive.
Chief Strategy Officer Lee Jae-sang (CSO), who served as the head of the marketing advertising group at Hyundai Motors, led the business, and five people, including Park Yong-han, head of the investment strategy division, from Samil Accounting Corporation’s Deal Division joined. The project name is’Odyssey’. After 10 years of journey, he got his name from Homer’s epic poem heading to his hometown Ithaca.
○ Reverse electrode achieved by speed and collaboration
Hive’s M&A team members have already made heavy deals such as the acquisition of Source Music, the agency of the girl group’Girlfriend’ (2019), the acquisition of KOZ and Pledis Entertainment (2020), investment in YG Plus, and the exchange of shares with Naver (last January). There is an experience that has come to pass. However, the cross-border deal to acquire a global media group was a completely different story.
In addition, a global giant was paying attention to Ithaca Holdings. Kevin Meyer, who was former Walt Disney CSO and led acquisitions such as Pixar, Marvel Entertainment, Lucasfilm, and Fox, was pursuing the acquisition of Ithaca in partnership with Blackstone, the world’s largest private equity fund (PEF) manager.
The chairman of the room, who was usually familiar with Brown, sought him out and persuaded him. JP Morgan, global law firm Paul Hastings, and Kim & Chang law firm joined as advisors. After hard work, Hive was able to get Brown to the negotiating table. Brown presented an amount of over 1 trillion won as a sale price at this meeting.
An official from the investment banking (IB) industry said, “It is difficult to accept, considering that ithaca’s EBITDA before amortization last year was only 26.2 billion won.” However, Chairman Bang immediately sent an’OK’ sign. The synergy with Hive was important, and the second question was how much Ithaca earned.
○ Formation of global music industry’partners’
The same was true of Ithaca’s opinion. Money is money, but I was attracted to the fact that by trading with Hive, you get a partner in the global music industry. In this transaction, 39 artists from Ithaca, including Brown, will participate in the paid-in capital increase allocated by Hive to a third party. Brown also joins Hive’s board of directors. It’s not a one-sided buying of the other, but a’bleeding’ deal.
An executive in charge of investment at an entertainment agency explained, “For pop stars such as Justin Bieber, Ariana Grande, and others who have been with Brown, this deal will have a meaning to increase their influence in the third world market.”
Hive has provided an opportunity to utilize BTS’ intellectual property rights (IP) in various fields. Ithaka Holdings has more than 60 subsidiaries and investment companies, including beauty brands, in addition to SB Project, a management company for famous pop stars. It is also supplying video, including concerts and documentaries, through contracts with Netflix and Amazon.
In particular, the securities industry is evaluating that Hive’s platform business’Weverse’ can be the biggest beneficiary of this M&A. YouTube subscribers No. 1 (Justin Bieber), No. 3 (BTS), and No. 4 (Ariana Grande) are all likely to nest in Weverse. Lee Ki-hoon, a researcher at Hana Financial Investment, predicted that “Weverse will also be the world’s largest online fan community platform where the No. 1~4 artists cooperate with Black Pink (YG Entertainment), the 2nd place on YouTube.”
Reporter Joonho [email protected]