Jones Day, Allen & Overy and French company Racine are helping orchestrate a private equity-backed deal that will bring a fast-growing French music streaming service to public markets at an estimated valuation of over €1 billion .
Deezer, a competitor to Spotify and other online music services founded in 2007, is merging with IP2O, a special purpose acquisition company (SPAC) backed by several French business and financial figures, including the fortune of the Pinault retail trade.
The deal, which values Deezer at 1.05 billion euros, is a precursor to a potential IPO 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 as well as 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 euros in revenue last year, although it is not yet profitable, according to company information.
Music streaming services have seen explosive growth in recent years, and Spotify and Universal Music have jumped in to raise capital through public offerings.
Backers of IP2O include Artemis, the investment arm of the French billionaire Pinault family, owners of retailers Printemps and La Redoute; Iris Knobloch, 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 advises Deezer with a multi-office team led in Paris by partner Renaud Bonnet and adviser Adrien Descoutures on corporate and stock market aspects; partner Nicolas André on French tax law; partners Edouard Fortunet and Olivier Haas on contract work and IP/IT; Jean-Michel Bobillo partner and counsel Gabriel Ferran in 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, according to a statement from Racine.
Allen & Overy advises placement agents JP Morgan, Societe Generale, Deutsche Bank AG and HSBC, with a team led by Paris-based partner Olivier Thébault and capital markets partner Diana Billik, the statement added.
Racine works for I2PO with a team led by partners Maud Bakouche, Marie Pouget and Bruno Cavalié, counsel Bruno Laffont, and counsel Bernard Laurent-Bellue on corporate and stock market aspects; partners Fabrice Rymarz and Xavier Rollet on taxation; partner Sophie Pasquesoone on contractual aspects; partner Eric Barbry on IP/IT; and partner Frédéric Broud and advises Guillaume Thuleau and Gladys Annaïmi in employment law.
A&O and Jones Day had not responded to requests for comment at the time of publication.