The Japan-based parent company of ebook retailer Kobo announces it will acquire OverDrive in a $410 million cash deal with Insight Venture Partners, OverDrive’s majority shareholder since 2010.
A leading distributor of digital content in the library market, OverDrive “will take advantage of the global reach, scale and technologies throughout Rakuten’s portfolio,” according to a press release issued today.
For Rakuten, buying OverDrive represents one of its biggest investments in its global ebook business since acquiring Kobo in 2011 for $315 million. The company sees digital content as one of three growth areas (finance and e-commerce are the other two) it is pursuing worldwide.
As Publishers Lunch points out, it remains uncertain how the acquisition might impact OverDrive’s partnership with Amazon on library ebooks.
The deal is set to close by the end of next month.
CLEVELAND, OH – March 19, 2015 — OverDrive, Inc., the leading eBook, audiobook and streaming video platform for libraries and schools, today announced it entered into an agreement to be acquired by Rakuten Inc., one of the world’s largest Internet services companies. Insight Venture Partners has been the majority shareholder of OverDrive since 2010. OverDrive (www.overdrive.com) will operate as a subsidiary of Rakuten USA and will work closely with other Rakuten companies.
Rakuten USA, headquartered in Boston, is the United States operating division of Rakuten. Rakuten companies provide a variety of consumer and business-focused services including eReading (Kobo), e-commerce (Rakuten.com, formerly buy.com, and Ebates), instant messaging (Viber), and others in the US, Canada and around the world. Since 2012, Rakuten (http://global.rakuten.com) has been ranked among the world’s “Top 20 Most Innovative Companies” in Forbes magazine’s annual list.
As part of the Rakuten family, OverDrive will take advantage of the global reach, scale and technologies throughout Rakuten’s portfolio. Once the transaction closes, OverDrive will operate as a subsidiary of Rakuten USA, and continue to be led by CEO Steve Potash, with its headquarters in Cleveland, Ohio. Kobo, headquartered in Toronto, Canada, and OverDrive will work together to enhance their abilities to deliver world-class digital content and reading technology services. The acquisition is expected to close in the next thirty days.
“I am excited for OverDrive to be part of the dynamic group of market leading e-commerce and digital media companies that Rakuten CEO Hiroshi Mikitani has assembled,” said OverDrive CEO Steve Potash. “From OverDrive’s world headquarters in northeast Ohio to the 50 countries in which our library and school partners reside, we will continue to connect readers with books and institutions by supporting all users and all popular devices, while promoting open industry standard formats and best practices. We look forward to working closely with the Rakuten companies toward a mutually beneficial future.”
Rakuten has identified digital content as one of its three key pillars of global growth, alongside e-commerce and finance. The acquisition represents a strategically significant addition to Rakuten’s eBook focus, alongside eReading company Kobo to its overall portfolio of digital content businesses. The acquisition follows a milestone year for Rakuten, which achieved record profits, entered new market segments, and acquired several market leading companies, including Ebates and Viber. Rakuten is also an investor in Pinterest and ride sharing service Lyft.
About OverDrive OverDrive is the leading global digital distribution platform, supplying the industry’s largest catalog of eBooks, audiobooks, music and streaming video to 33,000 libraries, schools and retailers worldwide. We support all major computers and devices, including iPhone®, iPad®, Nook®, Android™ phones and tablets, Chromebook™, and Kindle® (U.S. only). OverDrive offers all digital media on a single platform, and offers APIs to streamline a seamless user experience. OverDrive Read, the breakthrough EPUB and HTML5 browser-based reading experience, now supports fixed layout and narrated eBooks. Founded in 1986, OverDrive is based in Cleveland, Ohio USA. www.overdrive.com
About Rakuten Rakuten, Inc. (4755:Tokyo), is one of the world’s leading Internet services companies. We provide a variety of products and services for consumers and businesses, with a focus on e-commerce, finance, and digital content. Since 2012, Rakuten has been ranked among the world’s ‘Top 20 Most Innovative Companies’ in Forbes magazine’s annual list. Rakuten is expanding worldwide and currently operates throughout Asia, Europe, the Americas and Oceania. Founded in 1997, Rakuten is headquartered in Tokyo, with over 14,000 employees and partner staff worldwide.
For more information: http://global.rakuten.com/corp/.
About Rakuten Kobo Inc. Rakuten Kobo Inc. is one of the world’s fastest-growing eReading services offering more than 4-million eBooks and magazines to millions of customers in 190 countries. Believing that consumers should have the freedom to read any book on any device, Kobo provides consumers with a choice when reading. Kobo offers an eReader for everyone with a wide variety of E Ink eReaders and Google-Certified Android tablets to suit any Reader’s style including the award-winning Kobo Touch™, Kobo Mini, Kobo Glo, Kobo Aura, Kobo Aura HD, Kobo Arc, Kobo Arc 7, Kobo Arc 7HD, Kobo Arc 10HD – and the newly launched Kobo Aura H2O. Along with the company’s free top-ranking eReading apps for Apple®, BlackBerry®, Android®, and Windows®, Kobo ensures the next great read is justa page-turn away. Headquartered in Toronto and owned by Tokyo-based Rakuten, Kobo eReaders can be found in major retail chains around the world. For more information, visit www.kobo.com.