Believe S.A. to go private in €15 per share deal with TCV, EQT and founder Denis Ladegaillerie

PARIS, FRANCE: Believe S.A., a leading digital music company that helps independent artists and labels distribute and monetize their music online, has agreed to sell its majority stake to a consortium of funds managed by TCV and EQT, and its founder Denis Ladegaillerie, who will launch a tender offer for the remaining shares.

Believe S.A., a leading digital music company

The consortium has agreed to acquire the stakes of TCV Luxco BD S.à r.l., Ventech and XAnge, historical shareholders of Believe, representing respectively 41.14%, 12.03% and 6.29% of Believe shares at €15 per share, a 21% premium over the last closing price before the announcement.

In addition, Denis Ladegaillerie, the founder, CEO and Chairman of Believe, would contribute a portion of his Company shares (representing 11.17% of the share capital) and sell the remaining portion (representing 1.29% of the share capital) to the consortium. Such acquisitions and contributions would bring the consortium’s ownership at 71.92% of the capital.

The consortium has also obtained from other shareholders of the Company undertakings to tender their shares in the offer (representing 3% of the capital of the Company). Following the consummation of the blocks acquisitions and the contribution, the consortium would file a mandatory tender offer for the remaining Believe shares at €15 per share, with a view to take the company private should the consortium reach the levels to implement a squeeze-out.

The blocks acquisitions and the ensuing offer are subject to obtaining the necessary regulatory approvals, and the positive recommendation of the Board of Directors of Believe, which has favorably welcomed the proposal, without prejudice to the outcome of its detailed study of its terms, notably with the benefit of the report of the independent expert on the fairness of the offer price and the absence of ancillary arrangements affecting the equal treatment of shareholders.

The Board of Directors of Believe has created an ad-hoc committee composed of three independent directors, to review the work of the independent expert and prepare a draft reasoned opinion on the offer. Such reasoned opinion will be provided in the reply document prepared by Believe.

Believe has appointed Citigroup Global Markets Europe AG and Gide Loyrette Nouel as financial and legal advisers to assist the Company and the ad-hoc committee of the Board of Directors.

Believe, founded in 2005, is a global leader in digital music, with a mission to develop the future of music with artists and labels, powered by technology and data. Believe offers its clients a range of services, from music distribution and marketing to label and artist services, as well as tools and platforms to empower artists and labels to manage their careers and grow their audiences. Believe has over 1,270 employees in more than 50 countries, and works with over 850,000 artists and labels worldwide.

It is contemplated that the tender offer will be filed with the AMF during the second quarter of 2024, should the Blocks Acquisitions be consummated in the event that the conditions precedent are satisfied.

Believe S.A. posted a strong performance in 2023, and the company takes the opportunity of this communication to reiterate its 2023 outlook:

Organic growth of +14% for FY’23, or an adjusted3 organic growth of c. +19%.

Adjusted EBITDA margin slightly above 5.5%.

Positive free cash flow in H2’23. The generation was above expectations for the second half, and therefore free cash flow will be negative by only a few million euros on an annual basis.

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