One Horizon Group Inc (NASDAQ:OHGI) investors must not be thrilled to see the tech player’s hot news of the day. Here’s what we know-
The software maker has officially shaken hands to buy premier music production company C-Rod. Grammy-nominated, multi-platinum producer and composer Chris “C-Rod” Rodriguez founded the company in 2002, having worked with some of the biggest celebrities in the business: Rihanna, Jennifer Lopez, Lady Gaga, Enrique Iglesias, and Pet Shop Boys.
Founded in 2002, C-Rod has taken his company’s music productions and remixes time and time again to the top of the Billboard charts. The first-generation Cuban-American’s reputation precedes him, having worked on various #1 Billboard smashes, where over 100 songs have broken into the Top 40. C-Rod’s musical content has even warmed its way into popular motion pictures, including Emma Stone’s ‘Easy A.’
Both a songwriter as well as composer signed under Sony ATV Music Publishing, C-Rod has soared in the music production industry, succeeding in a slew of music genres- both domestically as well as internationally. The man behind One Horizon’s music production company takeover even has served as Governor on the Board of the Grammys.
With Latin production taking off, one of the most rapid-fire pockets of popular music these days (especially thanks to the digital streaming revolution), C-Rod has been a real stronghold in the movement. Heard Luis Fonsi and Daddy Yankee’s original ace ‘Despacito’ daily on the radio with Justin Bieber featured on the remix? C-Rod’s influence can be detected here. Since the song’s release January one year ago, ‘Despacito’ has now become the most streamed song on record, scoring almost 5 billion streams across multiple platforms.
For context, the Latin legend’s first breakout hit as a producer made its way through the musical grapevine in the start of the millennium, a song sung by Latin pop icon Paulina Rubio. Worthy of note, C-Rod is the face behind her first two singles that elevated the icon’s “Paulina” record to become of the most monster-selling albums in history. Many other famous Latin legends, from the likes of Celia Cruz to Chayanne to Ricky Martin to Thalia have turned to C-Rod’s production talents.
From where the OHGI team is standing, the “creative and financial opportunities” became all too compelling to ignore, eyeing the digital music and content streaming arena.
Terms, however, have yet to be disclosed, so shareholders are in the dark as to just how much cash is being exchanged with this deal. Investors apparently didn’t like this slice of acquisition buzz, as shares have since plunged to the market floor 19%.
“After closing our acquisition of a majority interest in 123Wish and as 123Wish is preparing to launch experiences with several of the world’s most relevant music artists and social media influencers, when presented with the opportunity to acquire C-Rod, one of the most widely recognized music production companies, working with premier artists in the Top 40, Latin, Dance, Hip-Hop and R&B markets, among others, we immediately recognized the synergies and the opportunity to deliver further value to our shareholders,” said Mark White, One Horizon Group’s Founder and CEO. “While the term sheet is subject to customary conditions including completion of due diligence, we expect to close the transaction next month.”
“At C-Rod, music is not only our business, it is our passion; our goal has always been to provide artists and labels not only with our creative input through production or composition but also to explore additional channel partnerships that are authentic to the artists’ brands and messaging,” said Chris “C-Rod” Rodriguez, C-Rod’s Founder and CEO. “There is real value in providing our artists and labels with access to the 123Wish marketplace of celebrity experiences and to the management team, digital technology and capital resources of NASDAQ-listed One Horizon Group; we have a shared philosophy to grow even more quickly within the evolving industry landscape driven by social media views and metrics and digital streaming.”
“After Martin Ward, CFO of One Horizon Group, and I met the C-Rod team at their state-of-the-art production facility in Miami’s Upper East Side, the alignment between the creative and financial opportunities for our businesses became evident,” said Mark White. “In the coming months, we plan to announce several corporate sponsorships for our 123Wish experiences and C-Rod has created national music spots for major brands like McDonalds, Philip Stein, Fanta, Tea Forte, and Chevrolet. C-Rod has also composed and produced musical content for various television networks including HBO, Bravo, Discovery Channel and A&E and its songs have featured in motion pictures such as ‘Easy A,’ starring Emma Stone.”
“As we continue to develop our blockchain technology that will underpin our 123Wish charitable contribution component and eventually, associated media buying and payment systems, we are also exploring opportunities for consolidation in the digital music and content streaming space and C-Rod has a long-standing, direct distribution contract with The Orchard by which C-Rod distributes content to all major digital music and video platforms worldwide,” added Mark White. “In addition to the 123Wish revenue we expect to recognize when we file our 10-K Annual Report next month, we also expect to report revenue related to this transaction. We fully expect to achieve more significant profits throughout 2018 and to issue further guidance when possible.”