Downtown to Acquire AVL Digital Group, Including CD Baby, AdRev & More

MusicLinkUp Daily Insight (Global)

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Downtown Music Holdings is acquiring AVL Digital Group and its portfolio of music distribution, rights management and artist services businesses the company announced Wednesday (March 27). 

AVL's digital businesses include AdRev, CD Baby, DashGo and Soundrop, which collectively distribute and monetize more than 10 million tracks on behalf of over 900,000 artists, labels and other rights holders. That amounts to the largest independent sound recording catalog in the music industry, according to the company.

Downtown Music Holdings is the parent company of Downtown Music Publishing and Songtrust. 

AVL Digital and its portfolio companies will continue to operate as a separate subsidiary of Downtown Music Holdings and will be led by CD Baby CEO Tracy Maddux, based in Portland, Oregon.

"Tracy and his team have built a portfolio of music businesses operating at unmatched scale," said Downtown founder and CEO Justin Kalifowitz in a statement. "AVL's technology, diverse offerings and artist-first approach are well-positioned to power some of the fastest growing segments of the industry."

In 2018, CD Baby alone generated $100 million in earnings for its independent artist, label and publishing partners. That accounts for almost one-sixth of total global independent artist revenue globally, according to estimated figures published by MIDiA Research and reported by Music Business Worldwide in January. 

"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."

With this acquisition, Downtown has significantly boosted its stature to a new level, building out its end-to-end music services and growing staff to more than 300 in 14 markets globally across North America, Europe, Asia, Australia and Latin America. 

Downtown's publishing division has already been an independent leader in the industry, repping a vast portfolio that includes iconic songs such as Gershwin & Heyward's "Summertime" and John Lennon and Yoko Ono's "Imagine." This year, it's contemporary songwriters were nominated for 18 Grammy Awards and have already scored multiple hits, including Hot 100 chart-toppers "Shallow" by Lady Gaga and Bradley Cooper and "Sucker" by Jonas Brothers

The company's Songtrust division, is one of the top royalty collection applications in the industry, serving more than 170,000 songwriters and publishers across 1.6 million song copyrights. It recently partnered with youth-focused streaming platform Audiomack and in late 2017 began expanding in Europe

"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," said Kalifowitz in a statement.

The acquisition is expected to close in early April and is subject to certain customary closing conditions. Downtown was advised by Perella Weinberg Partners and McDermott Will & Emery. Advisors for AVL included Stephens Inc., The Raine Group and Offit Kurman.

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 in order to continue offering artists with digital and physical product services.

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