(Bloomberg) -- The Korean company that launched K-pop sensation BTS is paying $1.05 billion for a star-studded U.S. media group behind the careers of global stars Justin Bieber and Ariana Grande.
Big Hit Entertainment, which is changing its name to HYBE, is investing 1.07 trillion won ($950 million) into its U.S. unit to acquire Ithaca Holdings LLC, led by music impresario Scooter Braun. Big Hit will pay a total of $1.05 billion to shareholders and bondholders to purchase Ithaca, according to a regulatory filing in Seoul Friday.
The acquisition of Ithaca would be the first major foray into the U.S. market for Big Hit Entertainment. Braun, currently Ithaca's chief executive officer, will join the board of HYBE, the companies said in a statement. As part of the transaction, Carlyle Group will sell its significant minority stake in Ithaca, which it has held since 2017.
The music industry has seen a flurry of deals amid the pandemic, which has prevented artists from touring, their primary source of income. Meanwhile, the growth of streaming services has boosted the value of music rights in recent years, buoyed also by low interest rates and Wall Street's interest in alternative assets. Rock stars like Bob Dylan cashed in on their old songs, so did Braun with Taylor Swift's early albums, though it created tension between the music manager and the singer.
Braun hailed HYBE's systems and said the tie-up would create “exponential” opportunities for new and existing Ithaca artists. HYBE Chairman and CEO Bang Si-Hyuk called the deal an “inevitable joining.”
Big Hit helped popularize K-pop, with BTS's “Dynamite” topping the Billboard Hot 100 in 2020. BTS was the first Asian act to be No. 1 on the U.S. music chart since Kyu Sakamoto held the No. 1 spot for three weeks in 1963.
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