Digital music distributors Orchard Enterprises and Digital Music Group have agreed to merge.
Company will be called the Orchard and continue to trade on Nasdaq. Current Orchard prexy-chief exec Greg Scholl will lead the combined company; DMGI chief executive Mitchell Koulouris will ankle the company, and Karen Davis, DMGI’s chief financial officer, will serve as DMGI’s interim CEO until the closing of the merger.
Combined company will have more than 1 million music recordings available for sale and thousands of hours of television, film and video programming.
The Orchard will continue to serve artists, labels, music publishers, television, film and video library owners and other rights holders by developing new ways to market and sell digital content. In addition, for digital and mobile retailers, advertisers, consumer brands and technology companies, the company will continue to provide a single point of access to a large digital content catalog.
The Orchard offers worldwide synchronization placement, co-marketing initiatives with consumer brands and global publishing administration. Among its clients are the North American independent labels Delicious Vinyl, Shanachie, SST, Smithsonian Folkways and Norton Records.
DMGI has music distribution and exclusive licensing partnerships with labels including Kill Rock Stars and with artists such as Daddy Yankee, Chamillionaire and the Commodores. It also has an extensive library of TV shows.
“DMGI’s owned library of digital rights and master recordings provides a natural platform for Orchard’s expansion into co-production and other creative financing and development initiatives with our artist and label clients,” Scholl said in statement.
As consideration for the acquisition of the Orchard, DMGI has agreed to issue 9 million shares of common stock and 4.5 million shares of convertible preferred stock to the shareholders of the Orchard, including its principal shareholder, Dimensional Associates. After five years, subject to certain conditions, the company can redeem all the preferred stock for $25 million.