Canadian company ROW Entertainment Income Fund has entered into an agreement to purchase U.S.-based KOCH Entertainment effective June 1st. The purchase price is approximately $80 million (U.S.)
KOCH Entertainment is one of the largest, full-service independent recording, music publishing and video and music distribution companies in the U.S. and Canada. According to its press release, the company is “vertically integrated and distributes its own content as well as third party audio and video labels on an exclusive basis.”
Among its various divisions are independent label KOCH Records and home video producer and distributor KOCH Vision. KOCH Entertainment’s recording and music publishing units produce and market, under KOCH private labels, adult contemporary, country, urban, hip-hop/rap and children’s music.
KOCH Entertainment is also involved in theatre music through its controlling interest in independent label DRG Records. KOCH was founded 19 years ago by Michael Koch and is based in New York City.
ROW Entertainment is the largest wholesaler of CDs and DVDS in Canada. As well, it is the largest specialty retailer of CDs and DVDs in the country’s secondary markets. ROW also operates a private-label business.
The specific businesses that ROW is purchasing are KOCH International Inc., KOCH Entertainment Distribution LLC, KOCH Music Publishing LLC, Canadian division KOCH Entertainment Inc. as well as an equity interest in some other entities.
ROW expects its purchase of these businesses will provide it with an entry into the U.S. home entertainment market, increase its product distribution capabilities, diversify its customer base and open up opportunities in the DVD sector.
The combined pro forma revenues of the two companies would have been $563 million (U.S.) for the 12 months ended December 31, 2004.
Michael Koch will remain CEO of KOCH Entertainment following the purchase. Also remaining in their positions are Bob Frank, president of KOCH Records, Michael Rosenberg, president of KOCH Entertainment Distribution and KOCH Vision, Dominique Zgarka, president of KOCH Entertainment Canada and Alan Grunblatt, executive vice-president of KOCH Records.
(Abstracted from KOCH Announces its Sale to ROW Entertainment, Canadian Income Fund, Press Release, May 10, 2005; and ROW Entertainment Fund to Acquire KOCH, Canadian Music Network, May 12 – 18, 2005)