Jones Day, Allen & Overy and French firm Racine are helping orchestrate a private equity-backed deal that will bring a fast-growing French music streaming service to the public markets at an estimated value of over €1 billion.
Deezer, a competitor to Spotify and other online music services founded in 2007, is merging with I2PO, a special purpose acquisition company (SPAC) backed by a number of prominent figures in French business and finance, including the Pinault retailing fortune.
The deal, which values Deezer at €1.05 billion, is a precursor to an eventual initial public offering of Deezer shares on Euronext Paris, the company’s CEO, Jeronimo Folgueira, said in a statement.
With 9.6 million subscribers and offering 90 million streaming songs plus podcasts and audiobooks, Deezer holds just 2% of the global streaming music subscription market but 29% of the French market and 17% in Brazil. The company generated €400 million in revenue last year, though it is not yet profitable, according to company information.
Music streaming services have experienced explosive growth in recent years, and both Spotify and Universal Music have jumped in to raise capital through public offerings.
I2PO’s backers include Artemis, the investment arm of France’s billionaire Pinault family, owners of retailers Printemps and La Redoute; Iris Knobloch, a director at Lazard and former president of WarnerMedia in France and Germany; and Matthieu Pigasse, head of Centerview Partners in France and co-owner of Le Monde.
Jones Day is advising Deezer with a multi-office team led in Paris by partner Renaud Bonnet and counsel Adrien Descoutures on corporate and stock market aspects; partner Nicolas André on French tax law; partners Edouard Fortunet and Olivier Haas on contractual and IP/IT; partner Jean-Michel Bobillo and counsel Gabriel Ferran on employment law; and partner Eric Barbier de la Serre and counsel Eileen Lagathu on competition.
The Jones Day team also includes New York-based partner Peter Devlin and Atlanta-based partner Patrick Baldwin on U.S. corporate and stock market law, and Washington, D.C.-based partner Andrew Eisenberg on U.S. tax law, according to a statement by Racine.
Allen & Overy is advising the placement agents J.P. Morgan, Société Générale, Deutsche Bank AG and HSBC, with a team led by corporate partner Olivier Thébault and capital markets partner Diana Billik, both based in Paris, the statement added.
Racine is acting for I2PO with a team led by partners Maud Bakouche, Marie Pouget and Bruno Cavalié, counsel Bruno Laffont, and of counsel Bernard Laurent-Bellue on corporate and stock market aspects; partners Fabrice Rymarz and Xavier Rollet on tax; partner Sophie Pasquesoone on contractual aspects; partner Eric Barbry on IP/IT; and partner Frédéric Broud and counsels Guillaume Thuleau and Gladys Annaïmi on employment law.
A&O and Jones Day had not responded to requests for comment at the time of publication.