As reported by Music Business Worldwide, Virgin Music Group, the global independent music subsidiary of Universal Music Group, has made significant waves in the industry by announcing a definitive agreement to acquire Downtown Music Holdings LLC (Downtown) for a substantial cash consideration of $775 million (approximately €737 million). This acquisition, pending regulatory approvals, is anticipated to conclude in the latter half of 2025.
Commenting on the landmark agreement, JT Myers, Co-CEO of Virgin Music Group, stated, “Justin Kalifowitz, Andrew Bergman and Pieter Van Rijn have built Downtown Music into one of the most diversified and respected operations in the world.” He emphasized the strategic importance of the merger, noting, “This combination enables us to expand on the Downtown legacy and offer the independent music community a dynamic and innovative global infrastructure both in terms of service offering and territorial footprint, and we look forward to working with the Downtown team to serve independent entrepreneurs, artists, and creators with an even broader portfolio of services.”
Downtown, recognized as a 'pure' services entity, operates across various facets of the music industry, including recorded music and publishing. The company has not held copyrights since divesting a portfolio to Concord for approximately $400 million three and a half years ago.
Justin Kalifowitz, Founder of Downtown Music Holdings, shared his enthusiasm for the union, stating, “On behalf of Andrew, Pieter and myself, it is very exciting for Downtown to be joining forces with Virgin Music.” He reflected on the significance of this transaction, adding, “This is a tremendous recognition of the importance and vitality of independent music, and the value that our company brings to its clients every day. Downtown was established with the belief that artists and entrepreneurs everywhere and at every stage are entitled to the same tools and opportunities to succeed. We have no doubt that the breadth and high level of service Downtown provides to its clients will be strengthened working with Nat, JT and the whole Virgin Music team.”
Nat Pastor, Co-CEO of Virgin Music Group, also expressed his optimism about the acquisition, stating, “It’s an exciting time for Virgin as we continue to build a next-generation music company for independent artists and labels. We aren’t just making an acquisition; this is an investment into the global independent music ecosystem and a commitment to nurture current and future creators and entrepreneurs with world-class support, services, and capabilities they require at any phase of their careers.”
Downtown serves as one of the premier service providers within the music industry. Its extensive technology and service offerings facilitate various aspects of the music business, including creation, distribution, publishing, marketing, royalty collection, financing, accounting, and payment services.
Founded in 2007 initially as a music publishing entity, Downtown has notably expanded, now operating over 20 offices across six continents. The organization features core divisions such as Artist & Label Services, Distribution, Royalties & Financial Services, and Music Publishing.
The company boasts a diverse portfolio that includes prominent businesses such as FUGA, Downtown Artist & Label Services, Curve Royalties, CD Baby, Downtown Music Publishing, and Songtrust. Impressively, Downtown serves more than 5,000 business clients and over four million creators across 145 countries, with its clients recently garnering nearly 150 nominations for the upcoming 2025 GRAMMYs.
In the interim period, Virgin Music Group and Downtown Music will maintain their independent operations as they await customary regulatory approvals. The integration of the two companies will proceed following the completion of the deal.
For this pivotal transaction, Downtown Music was advised by Goldman Sachs & Co. LLC and Skadden, Arps, Slate, Meagher & Flom LLP, while Virgin Music Group received counsel from Kirkland & Ellis LLP, PwC, and Freshfields.
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