RHM.L Regulatory News (RHM)

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014) AS IT FORMS PART OF THE DOMESTIC LAW OF THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED)

16 March 2021

ROUND HILL MUSIC ROYALTY FUND LIMITED

(the "Company")

Valuation Update

On 2 February 2021, the Company announced its plans to acquire the Pipeline Investments, as detailed in the prospectus published by the Company on 19 October 2020 ("the "Prospectus"), by way of a two-step process. The Pipeline Investments comprised the existing assets of Round Hill Fund One, a private fund whose investments are managed by Round Hill.

The first step was the acquisition of the assets of Round Hill Fund One excluding its shareholding in RH Carlin Holdings LLC ("Carlin") (the "First Investment") which was completed by the Company on 1 February 2021.

The Board is pleased to announce that the unaudited valuation of the Copyrights comprised in the First Investment was US$303,700,000 as at 31 December 2020, relative to the acquisition value of US$281,860,320 as at 30 June 2020, representing a 7.7 per cent. uplift. In 2020, the Copyrights within the First Investment achieved a net publisher's share (or NPS) of US$18.2 million compared with US$15.7 million in 2019, equating to a 15.7 per cent year-on-year increase. The Copyrights have been independently valued by Massarsky Consulting Inc.

The key drivers for the valuation uplift are Round Hill's active management of the Catalogues which has successfully increased year-on-year revenues, and a reduction in the discount rate used to arrive at the net present value of future cash flows from the 9 per cent. rate in the valuation of those assets as at 30 June 2020 to 8.5 per cent. in respect of the valuation as at 31 December 2020.

An updated valuation matrix will be available shortly on the Company's website at: www.roundhillmusicroyaltyfund.com.

The second step in acquiring the Pipeline Investments will involve the Company's acquisition of a 29.14 per cent. share in Carlin, owned by Round Hill Fund One (the "Second Investment"). The consideration payable by the Company in connection with the acquisition of the Second Investment will reflect the underlying valuation of the Copyrights owned by Carlin as of 30 June 2020 and is expected to be completed within the next few weeks.

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 recently incorporated 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 seventh 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.