djfrosty

A Blackstone-led group of investors is buying a majority stake in Citrin Cooperman, which owns one of music’s most important valuation firms. The Financial Times has reported that this deal gives the target an enterprise value of $2 billion. As part of the transaction, Blackstone is acquiring New Mountain Capital’s stake in the firm.

As the music industry’s catalog market grew red hot over the last decade, Citrin Cooperman has become a leading expert, helping buyers and sellers determine the value of musical IP. Its Music Economics and Valuation Services practice is co-led and founded by Nari Matsuura. It is also co-led by Barry Massarsky, who joined the firm after it acquired his own company, Massarsky Consulting, in 2022. The team’s many clients include power players like Hipgnosis Songs Fund, Primary Wave and Reservoir Media, and it has reportedly overseen roughly 750 catalog valuations worth more than $15.5 billion between 2021 and 2022 alone.

But the firm does far more than just music catalog valuations. Founded in 1979, Citrin Cooperman is a trusted advisor to more than 15,000 clients globally through various tax advisory and accounting services.

In late 2023, Citrin Cooperman was involved in a controversy surrounding its client, Hipgnosis Songs Fund. At the time, Hipgnosis announced that it would cancel a planned quarterly dividend payment to shareholders, due to a decision it said was made by Citrin Cooperman to reduce its expectations of retroactive payments from the Copyright Royalty Board’s Phonorecords III ruling by more than 50%, which it called an “industry-wide” issue. Billboard spoke to other catalog owners at the time who disputed the claim that this was “industry-wide,” saying there had been no recent updates regarding Phono III and that it seemed like a situation unique to Hipgnosis and Citrin Cooperman.

Deutsche Bank Securities Inc. is serving as financial adviser to Blackstone in the transaction, while Kirkland & Ellis LLP and Gibson, Dunn & Crutcher LLP are serving as its legal advisers. Guggenheim Securities, LLC is serving as lead financial advisor to New Mountain and Citrin Cooperman, with Koltin Consulting Group serving as an additional financial adviser to both parties. Simpson Thacher & Bartlett LLP, Zukerman Gore Brandeis & Crossman, LLP, and Hunton Andrews Kurth LLP are serving as legal advisers to New Mountain and Citrin Cooperman.

Alan Badey, CEO of Citrin Cooperman, said of the deal, “We are excited to have reached an agreement for Blackstone to invest in Citrin Cooperman as we enter our next chapter of growth. Blackstone will help us make additional investments in expanded service offerings and technology as we deliver on our continued commitment to best-in-class firm culture and providing an exceptional client experience. We thank New Mountain for their years of partnership in helping to build and support our business.”

Eli Nagler, a senior managing director at Blackstone, and Kelly Wannop, a managing director at Blackstone, said, “The Citrin Cooperman partners and staff have done an exceptional job making the firm a leader through an unwavering commitment to excellence and client service. We are excited to invest in the business to help it continue to provide the highest quality offerings moving forward.”

Andre Moura and Nikhil Devulapalli, managing directors at New Mountain, added, “We are proud of our successful partnership with Citrin Cooperman, and we thank the management team, partners and staff of Citrin Cooperman for all we have accomplished together over the last three years. We look forward to seeing Citrin Cooperman continue to thrive for the benefit of all its clients and stakeholders.”