Indigo Books & Music Inc. and internet service company Rakuten, Inc. have announced that Rakuten has agreed to acquire all of the outstanding shares of Kobo Inc. on a fully diluted basis for US$315 million. Led by Kobo CEO Michael Serbinis, Kobo will continue to function as a stand-alone operation with its headquarters, management team, and employees based in Toronto.
Indigo is currently the majority shareholder in Kobo, a global eReading service with one of the largest eReading catalogues in the world and more than 5.6 million readers in over 100 countries worldwide. Indigo expects to receive approximately US$140 million to US$150 million from the proceeds of the sale on a fully diluted basis.
Indigo founded Kobo and spun it off in 2009 as an independent player in the global eReading market. Both Indigo and Kobo believe that Rakuten is the right global partner for Kobo to continue to grow the company to its full potential. With over 50 million customers, and a global mandate, Rakuten’s e-commerce strength and broad experience will offer the support and expertise to enable Kobo to further expand its reach and solidify its position as a global leader in eReading.
“We are truly proud of the success that Kobo and Indigo have achieved. From start up, only 24 months ago, to becoming a strong global player with a unique reading experience and one of the largest multi-language eReading catalogues in the world, Kobo is now among the world leaders in the emerging eReading industry,” said Heather Reisman, CEO of Indigo and Chair of Kobo. “Rakuten will allow Kobo to meet the demands of competing with the very best players in the world. Notwithstanding the sale, Indigo will maintain a very strong relationship with Kobo, supporting the products and the services both in store and online and directly benefiting from the growth of the Canadian eReading market. The success of KOBO confirms that Indigo is a great brand and a strong platform on which we can continue to innovate and grow.”
“Kobo will continue its aggressive growth trajectory with Rakuten’s support,” said Michael Serbinis, CEO of Kobo. “We look forward to continuing to innovate, provide the best eReading experience for customers, and expand internationally to solidify Kobo’s leadership position in the global eReading market.”
The transaction is subject to customary closing conditions, including approval under the Investment Canada Act, and is expected to close in early 2012.