Round Hill, which has been involved in exclusive negotiations to buy Carlin America after submitting the winning bid in an auction, has signed a letter of intent to buy the publisher for $245 million. The deal, first reported by Bloomberg, is still subject to closing.
The catalog is filled with iconic songs, which is why it is able to command what will be a 16.3 times multiple on $15 million in net publisher’s share, or gross profit, if it closes at that price point. High quality publishing catalogs have been trading on a 12 times NPS multiple, but recently the asking valuation on publishing assets has escalated to higher multiples, as witnessed by this deal.
Carlin America's vast catalog includes such classics as "Spanish Harlem," "Sea Of Love," "Nashville Cats," "Viva Las Vegas," "Happy Together," "Cool Jerk," "Fever," "When The Saints Go Marching In," "Charlie Brown," "Monster Mash," "Good Lovin'," "What a Wonderful World," "Save the Last Dance for Me" and "Lola," according to the company's website.
Carlin’s writers include Elvis Presley, AC/DC, Artie Resnick, Bobby Darin, Faron Young, Hank Ballard, Rudy Clark, Fats Domino, George Jones, Jim Steinman, John Sebastian, Carole Bayer Sager, Billie Holiday, Gary Bonner and Harold Arlen, among others.
Sources recently told Billboard that Round Hill had experienced a momentary hiccup in lining up its financing when one of its backers, a Chinese investor, had pulled out of the deal. But more recently, sources said the deal is back on track.
Round Hill wasn’t the only one lobbing highball bids at Carlin America. Sources say at least three bidders were in the same ballpark pricing for the publishing company, but other bidders got cold feet when the bidding went beyond the $230 million mark, as the catalog supposedly has a lot of copyright termination and reversion risk. U.S. Copyright law allows creators to terminate copyright assignment and reclaim copyright ownership after 35 years for works created after 1978; and after 56 years for works written before then.
In addition to Carlin, SONGS Music Publishing recently came up for sale and is also asking for higher-than-usual initial bids of about $160 million. If SONGS sells for that amount, that would represent a 13 to 23 times multiple, depending on where its net publisher’s share comes in this year. This year, its NPS is projected to be $12 million, while last year, sources say, SONGS' NPS was $7 million.
Carlin didn’t respond to a request for comment and Round Hill executives were unavailable to comment.
