Monday, January 21, 2008

Windsong/Pinnacle Buy Themselves Out and Become Independent Again After 12 Years

MBO at U.K. Distributor Pinnacle

Senior management at leading U.K. independent distributor/exporter Windsong/Pinnacle has completed a buyout from its parent company Arvato Services, a subsidiary of German media giant Bertelsmann.

The management buyout (MBO) of the company -- based in Sidcup, Kent, south-east of London -- was led by Windsong/Pinnacle chairman Sean Sullivan and finance director Andy Leonard-Myers. Details of cost and funding were not disclosed.

"The team at Windsong/Pinnacle has worked hard to build and retain its unique position in the marketplace handling an enormous range of music, DVD and games," said Sullivan in a statement.

"We are excited at the prospect of returning to independence," he added, "and operating a business that is nimble enough to respond to increasingly complex market conditions and client needs."

Pinnacle distributes some 400 labels in the United Kingdom, including Anti/Epitath, Cooking Vinyl, Fierce Panda, New West, One Little Indian, Putumayo and Rykodisk.

According to a joint statement, the transaction will enable Arvato to "focus on its entertainment services business, which manages large customer relationships with recorded media companies in the U.K. and globally."

Noted Arvato Services U.K./Ireland chairman/CEO Matthias Mierisch, "we will also continue to grow our logistics services, specifically in hi-tech and healthcare sectors."

The statement added that, following the buyout, Pinnacle would look to expand its offerings to cover marketing and promotion support, strengthen its digital services and extend reach into European markets.

The current company was formed when record exporter Windsong Exports' founder Steve Mason bought the then-bankrupt Pinnacle Distribution in 1984. On the back of the success of the success of distributed label PWL's stars like Kylie Minogue, Jason Donovan and Bananarama, Pinnacle/Windsong Group chairman Mason built the company into an dominant force in U.K. indie distribution.

At its peak in the late 1980s, Pinnacle calimed to account for more than 10% of all U.K. music distribution; according to labels body the BPI, in 2006 it accounted for 5.1% of U.K. album shipments.

The Zomba Group acquired a majority stake of what had become Windsong International (comprising Windsong Exports and Pinnacle Distribution) in 1996. The company then became part of Bertlesmann's operations when BMG acquired Zomba in 2002. The Windsong/Pinnacle operatiosn subsequently became part of Arvato, which specializes in providing media and communication services. Mason retired in July 2004.

Source [Billboard]

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