Square, Inc., a financial services company led by Jack Dorsey has signed a firm agreement to acquire a majority stake in music streaming site TIDAL, adds Jay-Z to its board.
Square led by Jack Dorsey acquires a majority ownership stake in TIDAL through a new joint venture, with the original artists becoming the second largest group of shareholders, and Jay-Z joining the square group.
Square expects a ‘significant majority’ owner to pay a combination of $297 million in cash and shares per share. The existing artist partners will be the remaining partners. TIDAL will operate independently within the square with vendor and cash use ecosystems.
According to the companies, the acquisition expands the scope of “a new vertical to the economic empowerment of the square: for musicians.”
The press release added: “Artists are entrepreneurs with a dream and deserve access to the systems, tools and financial freedom to achieve those dreams at every stage of their lives.”
TIDAL board member and partner Shawn Carter or Jay-Z is expected to join Square’s board of directors subject to the completion of the transaction.
With the exception of Jay-Z, all of TIDAL’s artist partners will continue to be co-owners of TIDAL following the termination of the contract. At the end of the contract, square manager Jesse Dorogusker will serve as TIDAL’s interim leader. The transaction is subject to standard regulatory approvals and is expected to close in Q2 2021.
Square was primarily advised by Gibson, Dunn & Crutcher LLP as legal advisers and TIDAL with Reed Smith LLP and Cummings & Lockwood LLC as legal advisers.
“It comes down to a simple idea: to find new ways for artists to support their work,” said Jack Dorsey, co-founder and CEO of Square.
“New ideas are found at the crossroads, and we believe there is a compelling one between music and the economy.”
“I know TIDAL is a speciality as soon as I enjoy it, and it will continue to be a great home for music, musicians and culture.”
Shawn Carter or Jay-Z added: “I said from the beginning that TIDAL is more than just streaming music, six years later it has been a platform that supports artists at every stage of their careers.
“Artists need the best tools to help them on their creative journey. Jack and I had a lot of discussions about TIDAL’s endless possibilities, which made me even more excited about its future.”
“This shared vision gives me even more excited to join the square team. This partnership will be a game-changer for many. I look forward to being presented with this new chapter.”
Jesse Dorogusker added: “TIDAL sets a high standard for supporting artists, capturing music culture and delivering the best audio quality to fans.
“The square also sets a high standard for creating elegant, accessible and reasonable tools to empower sellers and individuals economically.”
“As we explore new artist tools, listener experiences and access to financial systems that help artists be successful, TIDAL and Square will be music-intensive and artist-centric.”
TIDAL was launched across Scandinavia in 2010 under its original name Wimp, which provides a stable and high-definition audio package. Aspiro, the former parent company of the platform, changed Wimp’s name to TIDAL in March 2015 before the project was acquired by Jay-Z’s led Panther Bidco.
In addition to Jay-Z, the company announced that its owners include 16 of the world’s greatest artists, which were unveiled at a press conference in New York at the end of March 2015.
Reports at the time stated that each of the artist owners of TIDAL would be offered a 3% stake in the company.
As of today, according to the streaming site’s website, TIDAL’s artist owners include: