Digital Music Group sets its IPO terms

While it hasn’t set a date for the offering, Digital Music Group Inc., which supplies recordings to online music stores, has set the terms for its initial public offering.

In papers filed with the Securities and Exchange Commission, Digital Music said it expects to offer 3.7 million shares at $8 to $10 per share. The proceeds could raise as much as $75 million in new capital. The company says that it will use the capital to acquire digital rights to additional music recordings and for general expansion.

Digital Music, which has the rights to sell over 200,000 music recordings in digital format, works with online music stores such as Apple iTunes Music Store, RealNetworks, Napster, Wal-Mart Music, MSN Music and Yahoo! Music.

Digital Music says it has more than 17,000 music recordings available for sale through online music stores.