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Downtown Acquires CD Baby Owner AVL in $200 Million Deal

Downtown Music Holdings, the parent company of Downtown Music Publishing and Songtrust, has signed a definitive agreement to acquire the AVL Digital Group and its portfolio of music-distribution, rights-management and artist-services businesses, including AdRev, CD Baby, DashGo and Soundrop, the company announced today.

The deal was in the vicinity of $200 million, according to Music Business Worldwide; a rep for Downtown declined comment.

A pioneer in digital distribution for independent artists, the company, which was a launch partner for iTunes in 2003, has a client base that now includes over 900,000 artists, labels and other rights holders, which is claims is the largest independent sound recording catalog in the music industry. Collectively, AVL’s portfolio companies distribute and monetize over 10 million tracks across content streaming services including Amazon, Apple Music, Spotify and YouTube.

AVL will be led by CD Baby CEO Tracy Maddux (pictured above, right), who is based in Portland, Oregon.

“Tracy and his team have built a portfolio of music businesses operating at unmatched scale. AVL’s technology, diverse offerings and artist-first approach are well-positioned to power some of the fastest growing segments of the industry,” said Downtown founder and CEO Justin Kalifowitz (pictured above, left).

“This transaction will allow us to take the services we offer the independent music community to the next level,” added Maddux. “We are excited to continue to build leading platforms that help artists release, promote and monetize their music all around the world.”

According to the announcement, this acquisition makes Downtown “the leading provider of end-to-end services to artists, songwriters, labels, music publishers and other rights holders.” Its global footprint will include over 300 employees spanning 14 markets in North America, Europe, Asia, Australia, and Latin America.

“Beyond shared values, the acquisition of AVL expands upon our existing portfolio and represents Downtown’s strategy of developing and investing in preeminent music businesses serving the full spectrum of music creators,” added Kalifowitz.

Established in New York in 2007, Downtown has emerged as a major force in publishing and the industry as whole. Its publishing division ranges from Gershwin & Heyward’s “Summertime” and John Lennon and Yoko Ono’s “Imagine” to Lady Gaga and Bradley Cooper’s “Shallow.” Its Songtrust division, a global royalty collection provider, serves over 170,000 songwriters and music publishers across 1.6 million song copyrights. Following the acquisition, which is expected to close in early April and is subject to certain customary closing conditions, AVL Digital and its portfolio companies will continue to operate as a separate subsidiary of Downtown Music Holdings.

AVL’s physical product divisions, Disc Makers, BookBaby, and Merchly, will be acquired in a separate transaction by the Disc Makers executive team as part of the newly-formed DIY Media Group. Disc Makers and AVL’s digital distribution businesses will maintain their strategic partnership to enable artists to offer both digital and physical products.

Downtown was advised by Perella Weinberg Partners and McDermott Will & Emery. Advisors for AVL included Stephens Inc., The Raine Group and Offit Kurman.

 

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