New York (September 16, 2008)–Amidst Monday’s news of large-scale buyouts like Bank of America’s taking of Merrill Lynch and failures like Lehrman Brothers, consumer electronics box retailer Best Buy announced plans to purchase the struggling digital music service Napster for $121 million.
The deal, designed to help bolster the retailer’s online offerings, will net Best Buy the 700,000 subscribers in Napster’s fold, along with its customer service entities, mobile entertainment efforts, and the roughly $67 million in cash and short-term investments held by the internet company–making the net cost of the deal $54 million. Shares are being purchased by Best Buy for $2.65, nearly twice the amount of last Friday’s closing price.
The digital firm’s management is expected to stay on with Napster, and likewise, the company and its 140 employees will stay in the company’s current headquarters in L.A. The move comes on the heels of last month’s announcement to roll-out musical instrument and recording equipment sales in 75-85 Best Buy stores.