London (UK) – EMI’s 7-year search to find a buyer for the company has finally come to an end. EMI agreed to be acquired by private equity firm Terra Firma Investments for $4.7 billion in cash.

Following a recommended cash offer placed by Terra yesterday, today said that is “recommending” the deal to its shareholders. According to the proposal, Terra will pay 265 pence for each EMI share, valuing the company at about $3.2 billion Euro or $4.7 billion, translating in to a 19.4% premium based on EMI’s share price at market close last Friday.

EMI has been at the center of acquisition talks and acquisition rumors since 2000. Among the more prominent parties to have been interested in EMI are private equity firm Blackstone Capital as well as Warner, which has placed numerous bids to purchase EMI over the past years. Most recently, EMI rejected a $4.1 billion offer from Warner Music Group (WMG) in March of this year. And even now, WMG may still be participating in the acquisition of EMI and enter into a bidding war with Terra, some media reports suggested.

The company declined to comment on whether it is still interested in EMI.

If Terra will be able to acquire EMI, the music publisher is likely to see a more dramatic aggressive strategy to move towards digital music distribution models. According to a statement released on Tuesday, EMI said that it will have to "refocus the business model of its recorded music division and accelerate the development of its digital business." It is unclear at this time what that means for the firm’s recent announcements to offer DRM-free music for Apple’s iTunes music catalog and Amazon’s upcoming music service.

Jupiter analyst Mark Mulligan considers the DRM-free music a “potential twist” in the acquisition of the EMI takeover. Mulligan wrote in his blog that a reversal of the DRM-free music initiative “would be a shame.”

 “Digital music needs DRM free as part of the online mix. EMI have been brave enough to put the first foot forward, now there is the waiting game to see whether any others feel compelled to follow suit. The industry needs brave moves such as EMI’s…even if it was forced by necessity rather than choice,’ Mulligan wrote.

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