RHM.L Regulatory News (RHM)

28 September 2021

ROUND HILL MUSIC ROYALTY FUND LIMITED

("RHM" or the "Company")

Acquisition of The O'Jays catalogue

Further diversifies portfolio with increased exposure to classic R&B and Soul

The Board of Round Hill Music Royalty Fund Limited is pleased to announce that the Company has acquired 100% of the master royalty income of 532 original recordings from the iconic American classic R&B group, The O'Jays.

Key Acquisition Highlights:

· The catalogue comprises 532 original recordings, including numerous timeless hits such as "Love Train", "Use Ta Be My Girl", "Cry Together", "Back Stabbers", "For The Love of Money", "Forever Mine", "Put Your Hands Together", "Stairway To Heaven" and "I Love Music";

· The catalogue acquired includes 100% of The O'Jays master royalty income;

· "Back Stabbers" was their first million-seller album and it produced many more hit singles including "992 Arguments", "Sunshine", "Time to Go Down" and the No. 1 pop hit "Love Train";

· The O'Jays "For The Love Of Money" was the theme song to the US hit reality TV show "The Apprentice", bringing their music to a whole new generation;

· The O'Jays are two-time Grammy Hall of Fame inductees for their songs "Love Train" and "For The Love of Money", and were honoured with the BET 2009 Life Time Achievement Award and inducted into the National Rhythm and Blues Hall of Fame in 2013; and

· The O'Jays have achieved 10 gold and 9 platinum albums throughout their 63-year career.

Background to the Catalogue

The O'Jays made their first chart appearance with the hit "Lonely Drifter" in 1963 but reached their peak success once they teamed up with Gamble & Huff, a group of producers and songwriters, who signed them to their Philadelphia International label in 1972. Following this, the O'Jays gained notoriety and emerged at the forefront of Philadelphia soul with "Back Stabbers" in 1972 and topped the Billboard Hot 100 in 1973, followed by "Love Train" in 1974. This success followed their debut album, "Comin' Through". More recently, The O'Jays were welcomed into the Vocal Group Hall of Fame in 2004, and The Rock and Roll Hall of Fame in 2005, and in 2013 they were inducted into National Rhythm and Blues Hall of Fame.

Catalogue Details

The Company's acquisition comprises 100% of The O'Jays' master royalty income in the catalogue.

The catalogue has significant exposure to Streaming, comprising 64% of revenue mix, with the balance being comprised of 3% Physical, 10% Download, 17% Sync and 6% Other. In terms of geographical exposure, 88% of the revenue is from the US, while the balance is from other countries.

The top songs ranked by revenue are: "Love Train", "Forever Mine", "For The Love of Money", "Back Stabbers", "Use Ta Be My Girl", "Cry Together", "Stairway To Heaven" and "I Love Music".

All figures above are based on the catalogue's royalty statements in the calendar years 2018-2020.

Disclosure of Financial Detail on Acquisitions

Due to commercial sensitivities, the Company is unable to disclose financial details for each acquisition as it occurs. However, on completion of the investment of proceeds from the C Share fundraise of US$86.5 million, together with the remaining undrawn balance of its existing revolving credit facility, the Company will make further financial disclosure on the acquisitions.

Trevor Bowen, Chair of Round Hill Music Royalty Fund, commented:

"We are delighted to announce the acquisition of 100% of the master royalty income of The O'Jays. The acquisition further demonstrates the ability of Round Hill to source and acquire catalogues which have produced long-term steady royalty revenue over the past decades. The addition of the O'Jays' catalogue provides further diversification in terms of artist, genre, vintage and income type, making it a welcome addition to our growing portfolio. We are delighted to see the Investment Manager competently executing on its pipeline of attractive opportunities."

Josh Gruss, Chairman and CEO of Round Hill, the Company's investment manager, commented:

"The O'Jays will be known to many as one of the main figures in the 70s' Soul scene in Philadelphia, which saw the genre come to the fore and a funk influence emerge which has shaped disco music for generations. We are pleased to be able to secure this exceptionally high quality catalogue, which will make a fantastic addition to the landmark portfolio of timeless music we are constructing for RHM, to support predictable and consistent revenue streams. We look forward to updating Shareholders further on our near-term pipeline of exciting opportunities."

The O'Jays' Eddie Levert and Walter Williams commented:

"We are very happy we found Round Hill to look after our lifelong catalogue.  We would like to thank Josh Gruss, Robin Godfrey-Cass, Michael Selverne, our management company 21st Century Artists, Toby Ludwig and our attorney Dorothy Weber."

FOR FURTHER INFORMATION

Notes: 

Unless the context otherwise requires, capitalised terms used in this announcement have the meanings in the Prospectus.

The Company is a non-cellular Guernsey company. The Company's Investment Objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property. In order to achieve its Investment Objective, the Company will invest in a songwriter's copyright interest in a musical composition or song (being their writer's share, their publisher's share and their performance rights) together with the rights in the recording of the musical composition or song (known as the master recording rights) together with all such rights and assets considered by its investment manager, Round Hill Music LP ("Round Hill"), to be ancillary thereto. 

Founded in 2010, Round Hill is a fully integrated owner and operator of music copyright properties and the sixth largest music publishing company in the US. Headquartered in New York with additional offices in Nashville, Los Angeles and London, Round Hill has an experienced management and investment team with an established reputation and extensive experience in the music and finance industries.