Simon Cowell’s Syco Entertainment raises $125m acquisition “war-chest”

Britain’s Got Talent

Simon Cowell’s UK- and -US production company SyCo Entertainment has raised $125m to be used as an acquisition fund.

The company said it will use the money as a “war-chest to grow the business through a mixture of strategic acquisitions and organic growth projects.”

Cowell originally launched the company as music label S Records in 2004, before rebranding the venture in 2010 and expanding its focus to include TV and film. It now owns the rights to globally successful TV formats Got Talent and The X Factor.

This move to further grow the company casts doubt on reports earlier in the year that Cowell was looking to downsize the firm and let “almost all of his staff go.”

The funding agreement was reached through the securitisation of the Got Talent competition franchise, according to ACF, the global media and entertainment investment bank, which advised on the deal.

ACF said that it advised Syco over a two-year period in a deal that it described as “the first of its kind” as it includes securitisation of various aspects of the Got Talent IP, including production margins and fees, digital income, franchise and original content sales, and sponsorship income. It is an approach more commonly applied to the music-industry’s royalty income streams.

ACF acted as the lead bank and advised Syco in both the UK and the US, alongside Memery Crystal, an international law firm based in the UK.

Thomas Dey, ACF’s founder and CEO, said: “ACF worked with Syco to formulate this financial strategy to support its plans and managed the entire process as the lead bank.

“Our brief was to create a structure to enable the company to maximise the full potential of its existing passive royalty income stream.  ACF has created a winning formula using our extensive experience from across the media and entertainment sector.  We are certain that this ground-breaking structure will be one that we will use for many media formats in the future.”