In connection with the deal, Square plans to name Shawn “JAY-Z” Carter to Board of Directors
SAN FRANCISCO-Sunday 7 March 2021 [ AETOS Wire ]
(BUSINESS WIRE)-- Square, Inc. (NYSE: SQ) announced today that it has entered into a definitive agreement to acquire a majority ownership stake in TIDAL, the global music and entertainment platform that brings fans and artists together through unique music, content, and experiences. Square expects to pay a mix of cash and stock of $297 million for a significant majority ownership stake, and existing artist shareholders will be the remaining stakeholders. TIDAL will operate independently within Square, alongside the Seller and Cash App ecosystems.
The acquisition extends Square’s purpose of economic empowerment to a new vertical: musicians. Artists are entrepreneurs with a dream and deserve access to systems, tools, and financial freedom to reach those dreams at every stage in their career. Square has helped millions of businesses start, run, and grow by providing them with tools needed for success. With Cash App, Square has made financial services more relatable and accessible to millions of customers, many of whom have been historically overlooked and underserved. Square sees an opportunity to leverage those learnings to help musicians find new ways to support their work and make better decisions through TIDAL.
“It comes down to one simple idea: finding new ways for artists to support their work,” said Jack Dorsey, cofounder and CEO of Square. “New ideas are found at intersections, and we believe there’s a compelling one between music and the economy. I knew TIDAL was something special as soon as I experienced it, and it will continue to be the best home for music, musicians, and culture.”
"I said from the beginning that TIDAL was about more than just streaming music, and six years later, it has remained a platform that supports artists at every point in their careers,” said Shawn “JAY-Z” Carter. “Artists deserve better tools to assist them in their creative journey. Jack and I have had many discussions about TIDAL’s endless possibilities that have made me even more inspired about its future. This shared vision makes me even more excited to join the Square board. This partnership will be a game-changer for many. I look forward to all this new chapter has to offer!”
TIDAL is the only music service built by artists, for artists—which is now more important than ever as consumers look for authentic digital connections with their favorite artists. TIDAL offers the premier listening experience, with superior sound quality and an extensive catalog of more than 70 million songs and 250,000 high-quality videos. TIDAL puts the fan experience at the center of every decision, providing artists direct access to their audience and allowing fans deeper connections to their favorite artists through original, exclusive, and curated content and events. TIDAL has a global presence with listeners in more than 56 countries and relationships with more than 100 labels and distributors.
“TIDAL sets a high standard for supporting artists, capturing music culture, and delivering the best audio quality to fans,” said Jesse Dorogusker, a Square executive who will serve as interim lead of TIDAL upon the closing of the transaction. “Square has also set a high standard for building elegant, accessible, and fair tools for sellers and individuals to economically empower them. Together, TIDAL and Square will be music-obsessed and artist-focused while we explore new artist tools, listener experiences, and access to financial systems that help artists be successful.”
TIDAL board member and shareholder Shawn “JAY-Z” Carter is expected to join Square’s Board of Directors subject to the closing of the transaction. A distinguished and acclaimed artist, businessman, and philanthropist, Carter founded preeminent entertainment company Roc Nation and sports agency Roc Nation Sports, launched and owns the successful “Made In America” festival, and executive-produced award-winning documentaries, among other achievements. Over the years, Carter has remained relentlessly committed to giving back to underserved communities, including through his work with the Shawn Carter Foundation and The REFORM Alliance.
In addition to JAY-Z, all of TIDAL’s artist shareholders will continue to be co-owners of TIDAL after the deal closes.
Based on current information, Square does not expect TIDAL’s financial results to have a material impact on Square’s consolidated revenue or gross profit in 2021. The completion of this transaction is subject to customary closing conditions including regulatory approvals. The parties expect to close the transaction in the second quarter of 2021. Square was primarily advised by Gibson, Dunn & Crutcher LLP as legal advisors and TIDAL was advised by Reed Smith LLP and Cummings & Lockwood LLC as legal advisors.
About Square, Inc.
Square, Inc. (NYSE: SQ) builds tools to empower businesses and individuals to participate in the economy. Sellers use Square to reach buyers online and in person, manage their business, and access financing. And individuals use Cash App to spend, send, store, and invest money. Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain, and the UK.
TIDAL is an artist-led global music and entertainment platform that brings artists and fans closer together through unique original content and exclusive events.
Available in 56 countries, the streaming service has more than 70 million songs and 250,000 high-quality videos in its catalog along with original video series, podcasts, thousands of expertly curated playlists and artist discovery via TIDAL Rising. With the commitment of its owners to create a more sustainable model for the music industry, TIDAL is available in premium and HiFi tiers—which includes Master Quality Authenticated (MQA) recordings as well as Sony’s 360 Reality Audio recordings.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements regarding the proposed acquisition of TIDAL by Square (the “Company”) and the timing to close the acquisition; the future performance of the Company and TIDAL; the perceived benefits of the acquisition; expectations around the financial impact of the acquisition on the Company’s financials; and the Company’s expectations regarding scale, economics, and the demand for or benefits from its current and future products, product features, and services. Such statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause the Company’s actual results, performance, or achievements to differ materially from results expressed or implied in this press release, and reported results should not be considered as an indication of future performance. Investors are cautioned not to place undue reliance on these statements.
Risks that contribute to the uncertain nature of the forward-looking statements include, among others, the possibility that the transaction will not close or that the closing may be delayed; the ability to secure required regulatory approvals or otherwise satisfy other closing conditions in a timely manner, or at all; the proposed transaction may not advance the parties’ business strategies; the ability of the company to retain the artists and customers of TIDAL; the ability to realize the expected benefits from the transaction in the expected time period, or at all; disruptions from the transaction on ongoing operations; potentially incurring significant transaction costs; the Company’s ability to execute a new business vertical and integrate TIDAL’s products; and unknown, underestimated, or undisclosed commitments or liabilities, as well as other risks listed or described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recently filed Annual Report on Form 10-K which is on file with the SEC and available on the investor relations page of the Company’s website. All forward-looking statements are based on information and estimates available to the Company at the time of this press release and are not guarantees of future performance. Except as required by law, the Company assumes no obligation to update any of the statements in this press release.
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