Napster to go to Best Buy for $121M

Best Buy Co. Inc. moved more aggressively into the content-distribution arena, agreeing to pay $121 million to pick up the subscription-based online and mobile music company Napster.
The big-box retailer said it will pay $2.65 per share in cash for Napster and its 700,000 subscribers. The transaction – which is expected to close during the fourth quarter of this year – actually amounts to a net $54 million deal given Napster’s $67 million in cash and short term investments.
What the pick-up might mean in the world of mobile entertainment is unclear, however. Napster Mobile has solid distribution in several markets around the world thanks to deals with AT&T Mobility, NTT DoCoMo and O2, but the company has offered few details regarding uptake of its wireless offerings.
Best Buy, meanwhile, is picking up steam as it expands its mobile operations. The company is looking to build nearly 200 wireless-only retail locations in the United States and is working with Handango Inc. to distribute SD cards that are pre-loaded with mobile content.
“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, Best Buy’s EVP of connected digital solutions. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions.”