Music an ‘exceptionally active’ market, says Reed Smith’s Josh Love; Thoma Bravo to sell Command Alkon to FP; Clearlake partners with OpenAI

Happy Wednesday, PE Hubsters! Rafael Canton here with you for the US edition of the Wire.

We’ll kick off the Wire with by delving into the music industry. PE Hub’s Iris Dorbian caught up with Josh Love, a partner in law firm Reed Smith’s global entertainment and media industry group. The conversation focused on recent developments in music investing and how AI is factoring into the music business.

Next, we have a deal from this week. Thoma Bravo announced yesterday that it has agreed to sell a majority stake in Command Alkon to Francisco Partners.

We’ll then move over to technology with an update on private equity firms partnering with AI businesses. On Tuesday, Clearlake Capital announced that it has partnered with OpenAI to accelerate AI adoption across its portfolio. We’ll also look at what other PE firms like Blackstone, TPG and EQT have done so far.

Active market

Investing in music royalties and copyrights became red hot during the early days of the covid pandemic when the live performance market shut down, and legacy recording artists sold their catalogs to strategics or private equity firms to generate revenue, writes PE Hub reporter Iris Dorbian. Since then, investor appetite for music intellectual property has remained steady even as live events pick up.

Josh Love, a partner in law firm Reed Smith’s global entertainment and media industry group, has advised on some of the best-known music deals. Throughout his career, Love has negotiated and closed more than $4 billion in purchases and sales of recorded music and music publishing assets.

Recently, Love offered his insights on music investment deals in a Q&A with Iris, weighing in on topics ranging from current trends to how the industry is navigating AI. Here’s an excerpt from the interview:

What are some notable developments you are seeing taking shape this year in the music space?

It’s an exceptionally active market. We’re seeing some of the biggest deals the music industry has ever seen this year. Concord/BMG is one example. There’s also a maturation of the market. Funds that were built over the last several years are now beginning to trade assets or bring in secondary investors, which I think is a sign of a healthy and increasingly sophisticated market.

You’re also seeing all of the [major music companies] aligned with financial partners. A few years ago, the majors weren’t really competing in the space, while a number of financial buyers were building portfolios. Today, the majors are players in a meaningful way, often with access to different sources of capital and partnership structures that allow them to compete much more aggressively.

Not everybody who has gotten into this space is sticking around. Some investors dipped their toes in and decided it wasn’t for them. Others are doubling down. At the same time, given the increased competition for dealflow, we see the net being cast much wider than ever before. There are buyers pursuing iconic catalogs, others focused on lower middle-market opportunities, and others targeting small deals that wouldn’t have traded in the past. Everybody has a different investment thesis.

How is AI factoring into the equation? Is it being seen as a positive or a negative in the music industry?

It’s both. One of the challenges of the music business is that it’s an extraordinarily data-intensive industry. Every royalty involves countless micro-transactions across multiple rights, territories, and platforms. AI has enormous potential to improve administration, metadata management, royalty processing and licensing efficiency. There’s a lot of excitement around using AI to reduce leakage and make the overall ecosystem more efficient.

On the generative AI side, you’re seeing the major music companies actively working through both legal and commercial issues. They’re obviously focused on protecting intellectual property, but they’re also exploring licensing models and partnerships with AI companies.

I think the industry learned important lessons from prior technological shifts. Rather than simply resisting new technology, there’s a strong desire to develop sustainable business models that appropriately compensate rights holders while allowing innovation to continue. The companies that can successfully balance those two objectives will likely be best positioned going forward.

Read on for more of Iris’ Q&A with Love, including why PE firms and music labels are launching joint ventures.

Mission-critical operations

Moving away from music to tech. Thoma Bravo announced yesterday that it has agreed to sell a majority stake in Command Alkon to Francisco Partners.

Based in Hilliard, Ohio, Command Alkon is a software and platform technology provider for the heavy building materials industry. More than 14,000 plants in over 80 countries use the company’s technology.

The transaction is expected to close in the second half of 2026 and is subject to customary regulatory approvals.

“Command Alkon has built a technology platform that powers mission-critical operations across one of the world’s most essential industries,” Petri Oksanen and Quentin Lathuille, partners at Francisco Partners, said in a statement. “Infrastructure investment is accelerating across major markets, and artificial intelligence is significantly enhancing the value Command Alkon can bring to its customers.”

Thoma Bravo first acquired Command Alkon in 2020 from Quilvest Capital Partners. Heidelberg Materials will retain its significant minority stake in Command Alkon.

The investment in Command Alkon played a part in Thoma Bravo acquiring civil construction software company HCSS in 2021.

Technology shift

On Tuesday, Clearlake Capital Group announced a strategic partnership with OpenAI to accelerate artificial intelligence adoption and transformation across Clearlake’s 50-plus portfolio companies.

Through the partnership, Clearlake and OpenAI will work together to identify, develop, and deploy high-impact AI tools that enhance operational efficiency and decision making, unlock new growth opportunities, and create greater value for customers and stakeholders.

“We believe AI represents one of the most significant technology shifts of our generation and a powerful opportunity to create value across industries,” said Prashant Mehrotra, partner and managing director at Clearlake, in a statement. “Our partnership with OpenAI reflects Clearlake’s commitment to helping portfolio companies harness transformative technologies to strengthen operations, accelerate innovation, and better serve their customers.”

Clearlake also has AI Labs, an in-house team focused on supporting its portfolio companies to evaluate AI opportunities, prioritize use cases, make build-versus-buy decisions, and accelerate implementation across products, operations, and customer-facing functions.

Clearlake’s partnership with OpenAI follows its announced partnership in July with Databricks and tech consulting firm West Monroe to accelerate the adoption of data, analytics and AI capabilities at the PE firm’s portcos.

PE Hub has been tracking PE firms who have been active in partnering with AI businesses. In July, I covered Blackstone, Hellman & Friedman and Anthropic launching the official brand of Ode with Anthropic in July. The company’s formation was first announced in May.

Other collaborations include OpenAI launching the OpenAI Deployment Company, aimed at helping businesses build and use AI systems. DeployCo is majority-owned by OpenAI. The company has 19 global investment firms participating in the new business as minority stake investors. TPG is the lead investor. Advent International, Bain Capital and Brookfield are also investors. EQT, Thoma Bravo and Vista Equity Partners have also built partnerships with Google.

That’s it for me. If you have any questions, thoughts, or want to chat about deals in the tech, consumer or sports sectors, please email me at rafael.c@pei.group.

Tomorrow, Craig McGlashan will be with you for the Europe edition of the Wire, while Michael Schoeck will write the US edition. Be on the lookout for Michael’s weekly update of companies coming to market.

Cheers,

Rafael