Napster has been sold to Best Buy for $121 million despite losing more than $16 million last year.
Best Buy Co has entered into an agreement to buy all outstanding shares of Napster for $2.65 a share, giving the company an 86% increase in share price as of close of trading today.Napster has approximately 140 employees.
“This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers,” said Brian Dunn, President and COO of Best Buy in a statement. “Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want.”
Best Buy, a brick and mortar operation, will use Napster to extend into the digital world.
“We believe Napster brings us excellent capabilities in the mobility space, as well as international operations and an established team of technology experts,” said Dave Morrish, Executive Vice President - Connected Digital Solutions of Best Buy. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers. We believe Napster will be an outstanding addition to our already robust portfolio of partners and offerings in the digital music space.”
The deal is expected to close before the end of this year.
