There was minimal debate this week about how much Warner Music Group paid to acquire 300 Entertainment from Kevin Liles.
Some MBW sources familiar with the deal have suggested the takeover, announced Thursday, December 16, would cost Warner around $400 million; others have suggested the final price was just north of that figure.
Now we know for sure: Warner paid $400 million, on the nose, to acquire 300…. and paid him in cash.
According to an SEC filing released yesterday (December 17), Warner purchased a US-based company called Theory Entertainment LLC, doing business as 300 Entertainment, on the day of the announcement (December 16).
This agreement was in accordance with the terms and conditions of a merger agreement between Warner Music and various parties involved.
The filing reads: “On December 16, 2021, Warner Music Group Corp. (the “Company”) purchased Theory Entertainment LLC from d/b/a 300 Entertainment, pursuant to the terms and conditions of the merger agreement of the same date between Warner Music Inc. and MM Investment LLC, both wholly owned subsidiaries of the Company, Buyer’s Representative, Trifecta Merger Subsidiary LLC, Theory Entertainment LLC d/b/a 300 Entertainment and Seller’s Representative.
The filing further confirms, “The merger consideration was $400 million in cash, subject to adjustment for working capital, cash, debt and expenses.”
Warner announces that it will publish the full text of the merger agreement in its next quarterly earnings update for investors.
To finance the acquisition, Warner appears to have used cash from a $535 million debt increase announced last month.
Led by CEO Kevin Liles, 300 Entertainment is one of the most successful modern independent labels in the United States.
The company was founded in 2012 by Liles alongside his former Warner Music and Def Jam colleague Lyor Cohen.
Their 300 co-founders were Roger Gold (now Camila Cabello’s manager) and Todd Moscowitz, who recently sold a majority stake in his own semi-indie label – Alamo Records – to Sony in a nine-figure deal. .
Google/Alphabet was an early minority investor in 300, but has since given up that capital.
Following the acquisition of Warner, 300 will continue to be led by Kevin Liles. Additionally, Liles becomes CEO and Chairman of Warner’s Elektra Music Group.
300 Entertainment’s biggest hit artists to date include Megan Thee Stallion, Fetty Wap and Young Thug.The music industry around the world