logo
Plus   Neg
Share
Email

RealNetworks Doubles Stake In Rhapsody Intl., Becomes Majority Owner Of Napster

RealNetworks, Inc. (RNWK) said Tuesday that it has acquired debt and equity interests in Rhapsody International, which does business as "Napster," from Rhapsody Applebee, LLC, an entity managed by Columbus Nova Technology Partners or CNTP.

RealNetworks noted that the purchase took place after it sought and received special approval from the U.S. Treasury Department's Office of Foreign Assets Control or OFAC to purchase the sanctioned stake in Napster.

Following the transaction, RealNetworks has now become the majority owner of Napster, with about 84 percent of outstanding stock, up from its previous stake of about 42 percent.

In exchange for all of the CNTP-managed equity, debt, and other interests in Napster, RealNetworks has committed to pay $1 million cash up front and an additional $14 million over time subject to certain conditions, with additional consideration depending on subsequent events, for a total of up to $40 million.

The entity managed by CNTP would receive the full $40 million in the case of a sale or similar liquidity event within the next five years where total equity value of the 42 percent equity interest acquired would exceed $60 million.

RealNetworks noted that more details are available in its 8-K filed today to report the Napster transaction.

Napster's "Powered by Napster" music and audio products and services generate revenue primarily through subscriptions either directly to consumers or through distribution partners, and through technology and platform licensing and operating fees.

Napster will continue to run as an independent subsidiary of RealNetworks with its own board of directors, strategy, and management team. Bill Patrizio will continue to be Napster's CEO, and Rob Glaser will continue as Napster's Chairman.

RealNetworks will report its fourth-quarter and full year 2018 results on February 6.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
A new survey by the National Restaurant Association or NRA has painted a grim picture regarding the outlook for the U.S. restaurant industry. According to the NRA's Restaurant Industry Tracking survey for May 2020, most restaurant operators in the U.S. said they do not expect their business to return to normal during the next several months. Tyson Foods, Inc. announced that its 815 workers were found to be coronavirus or Covid-19 positive at the facility-wide testing in two Iowa plants in Council Bluffs and Storm Lake. Meanehile, Storm Lake, Iowa pork facility will resume limited production on Wednesday following a temporary halt for additional deep cleaning and sanitizing. Swedish fashion retailer Hennes & Mauritz AB or H&M has temporarily shuttered 95 of its stores in various regions across the U.S. following violence and looting amid the unrest related to the death of George Floyd. Street protests, some peaceful and some violent, erupted across the nation after Floyd was mercilessly killed by Minnesota police.
RELATED NEWS
Follow RTT