Pearson has announced it is to invest in Barnes & Noble's Nook media
Nook Media is a new company consisting of Barnes & Noble's digital businesses including its NOOK e-reader and tablets, the NOOK digital bookstore and its 674 college bookstores across America.
Pearson will invest $89.5m in cash in NOOK Media, gaining a 5% equity stake. Following the transaction, Barnes & Noble will own approximately 78.2% of NOOK Media and Microsoft will own approximately 16.8%. Subject to certain conditions, Pearson will earn the option to purchase up to an additional 5% ownership in NOOK Media.
Pearson's strategic investment in NOOK Media will help accelerate customer access to digital content by pairing the Pearson's expertise in online learning with NOOK Media's expertise in online distribution and customer service. This will facilitate improved discovery of available digital content and services, as well as seamless access.
The bookselling industry has been in transition as readers are drawn to a growing array of digital devices. The Nook e-reader is in a highly competitive and expensive battle with tablets from Apple Inc., Google Inc. and Amazon.com Inc.
Barnes & Noble said it plans to report holiday-sales results Thursday but warned they likely fell short of expectations and the Nook business won't meet goals for the year ending in April. The company didn't offer any specific metrics.
Barnes & Noble reported last month it swung to a fiscal second-quarter profit amid strong sales of Nook-related content. Total sales slid 0.4% as the consumer-bookstore division's revenue declined, but total Nook revenue jumped 5.6% to $160.3 million, thanks to a 38% surge in content sales.
Will Ethridge, CEO of Pearson North America, said:
"Pearson and Barnes & Noble have been valued partners for decades, and in recent years both have invested heavily and imaginatively to provide engaging and effective digital reading and learning experiences. This new agreement extends our partnership and deepens our commitment to provide better, easier experiences for our customers. With this investment we have entered into a commercial agreement with NOOK Media that will allow our two companies to work closely together in order to create a more seamless and effective experience for students. It is another example of our strategy of making our content and services broadly available to students and faculty through a wide range of distribution partners."
An analysis of recent deals including an up to date exit valuation of MPW.
Selling your company is likely to be a once in a lifetime experience. It is essential you get it right.More →
Deal origination - acquisitions - We help quoted companies and private equity houses source acquisitions in the UK and overseas.
Deal origination - disposals - We help owners of companies wishing to dispose of their business.
IPO advice - We provide strategic, financial and valuation advice to companies considering an IPO.
Valuation - We undertake valuations for ESOP transactions, employee share schemes and for a wide range of fiscal, legal and commercial purposes.
Our corporate finance skills can be employed in a wide range of sectors. We have a particular strength in animal health, education, outsourcing, IT, data analytics and financial publishing.More →