Mergers & Acquisitions

Mergers & Acquisitions

November 09, 2011

Japanese Retailer Rakuten to Acquire Canadian E-Reader Maker for $315 Million

Japan’s popular online retailer Rakuten is the next company to position itself in the highly competitive tablet and e-reader markets by announcing is will acquire e-reader maker Kobo for $315 million.

The Tokyo-based company said on Wednesday it has agreed to pay $315 million in cash for Kobo Inc., whose majority shareholder is book retailer Indigo, according to the AFP, and which makes a popular Canadian e-reader.

“The deal marks a new step for the Japanese firm as more companies look to position themselves in the highly competitive tablet and e-reader markets in the wake of the success of Apple’s (News - Alert) iPad and Amazon’s Kindle,” the report said.

The global e-book market is one of the fastest growing segments of the consumer technology industry, with a compound annual growth rate of 36 percent through 2015, according to forecast from International Data Corporation.

Kobo was founded by and spun out of Indigo, the largest book, gift and specialty toy retailer in Canada, in December 2009.

“Since that time, Kobo has become a fierce competitor in the eBook marketplace, with a family of innovative e-readers, a wide range of e-reading apps, one of the largest e-book catalogues, an innovative social platform and retail partners around the globe,” according to a company statement released Nov. 9.

Rakuten will pay cash for a 100 percent stake in Kobo, which has positioned its technology as a platform that allows readers to connect with each other through integration with sites such as Facebook and Twitter (News - Alert).

Kobo CEO Michael Serbinis said the companies coming together will strengthen their overall position in the market.

“We share a common vision of creating a content experience that is both global and social. Rakuten is already one of the world’s largest e-commerce platforms, while Kobo is the most social eBook service on the market and one of the world’s largest eBook stores with over 2.5 million titles,” Serbinis said. “This transaction will greatly strengthen our position in our current markets and allow us to diversify quickly into other countries and e-commerce categories.”

Upon closing the acquisition, company officials said Kobo will continue to maintain its headquarters, management team and employees based in Toronto, Ontario.

Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TMCnet, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Rich Steeves

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