Terra Firma Sells 15% Stake in EMI for £250M, Out in 2012

From Dan Sabbagh, Times Online:

Terra Firma, the new owner of EMI, is close to completing a £250 million equity fundraising, after telling would-be investors that it can lift profits in recorded music from £61 million in 2007 to £528 million in 2012.

The venture capital group, run by Guy Hands, is selling a stake of about 15 per cent of EMI, at what is thought to be broadly the same £1.5 billion equity valuation it applied when it took over the music major behind Kylie Minogue and the Spice Girls this year.

Terra Firma is predicting an exit in 2012 which, if its plans come off, would mean the company being sold for an enterprise value of £9.4 billion – it was bought for £3.2 billion, including debt. Borrowings taken on in the wake of the deal are approaching £2.5 billion. At this sale price, Terra Firma’s annual rate of return would be 33 per cent.

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