(l to r) Stem CEO Milana Lewis, Concord Label Group head Tom Becci, and Stem president Kristin Graziani. Photo Credit: Erica Hernandez
Concord has officially acquired Stem Disintermedia’s distribution division and confirmed the spin-off of the Tone royalty platform.
Nashville-headquartered Concord reached out with a formal confirmation this morning, after we took an in-depth look at the soon-to-be-announced transaction last week.
Also as of last week, evidence suggested that the purchaser, having reportedly topped interested parties including Sony Music, was only securing certain components of Stem’s indie-distribution and artist-advance operation.
Now, Concord itself has acknowledged as much, noting that the partial acquisition specifically encompasses Stem Distribution.
Moving forward, the latter “will continue to be operated as a separate division” under existing execs Milana Lewis (CEO) and Kristin Graziani (president), the buyer indicated.
On the personnel front, “[c]urrent staffing and operations are not anticipated to be affected by the deal,” per Concord, which further underscored plans to “accelerate Stem’s global expansion.”
“Milana and her team have spent a decade creating a company that provides immense value to both artists and labels,” added Concord CEO Bob Valentine. “Like Concord, their focus has always been giving artists the tools they need to realize their visions and grow their careers. I am excited to welcome the Stem team to Concord and look forward to witnessing our collective success.”
As for what’s not included, Stem’s Tone royalty-management platform “is being spun off and will be a stand-alone business going forward with Concord as one of its investors,” according to the purchaser.
It’s unclear exactly what this means from a team-member perspective. Tone has between 11 and 50 employees, its LinkedIn page shows, though unsurprisingly, there’s quite a bit of staffing overlap between the entity and Stem proper.
Meanwhile, Concord in its official release didn’t come right out and elaborate upon the status of Stem’s Scale, which handles artist advances. But according to The Hollywood Reporter (and given the release’s emphasis on Stem Distribution), the deal doesn’t extend to the financing side.
Regarding the price tag, Concord and Stem opted against disclosing valuation particulars, and it appears we’ll have to be content with a rather broad approximation.
Last week, we pointed to a potential $100 million Stem sale price – roughly double the amount identified by some but not all rumblings surrounding the transaction pre-announcement.
Earlier today, Variety seemed to (largely) agree with that pricing possibility; to name one piece of evidence, the appropriate coverage’s URL contained “90-million” at the time of this writing.
Nevertheless, for a while post-publishing, the article body was updated to axe any mention of the $90 million price. Then, another round of edits apparently brought the figure back into the text, which still touches on the $50 million value “rumored earlier.”
In other words, at least when it comes to public knowledge, things aren’t set in stone here. And as we previously reported, despite the above-described spin-off, even $100 million wouldn’t necessarily represent a massive multiple for investors.
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