Roundup: Microsoft Investing $300 Million in Barne & Noble’s Digital Reading Business

Official Announcement

• Barnes & Noble and Microsoft Form Strategic Partnership to Advance World-Class Digital Reading Experiences for Consumers

Barnes & Noble Inc. and Microsoft today announced the formation of a strategic partnership in a new Barnes & Noble subsidiary, which will build upon the history of strong innovation in digital reading technologies from both companies. The partnership will accelerate the transition to e-reading, which is revolutionizing the way people consume, create, share and enjoy digital content.

The new subsidiary, referred to in this release as Newco, will bring together the digital and College businesses of Barnes & Noble.  Microsoft will make a $300 million investment in Newco at a post-money valuation of $1.7 billion in exchange for an approximately 17.6% equity stake. Barnes & Noble will own approximately 82.4% of the new subsidiary, which will have an ongoing relationship with the company’s retail stores. Barnes & Noble has not yet decided on the name of Newco.

The inclusion of Barnes & Noble’s College business is an important component of Newco’s strategic vision. Through the newly formed Newco, Barnes & Noble’s industry leading NOOK Study software will provide students and educators the preeminent technology platform for the distribution and management of digital education materials in the market.

SEC Filing (Additional Details)

Direct to Barnes & Noble 8K Filing (4/30/2012)

Coverage

• Microsoft invests $300m in Barnes & Noble’s Nook; more e-books for Windows (via paidContent.org)

• Microsoft and Barnes & Noble Team Up to Take on Amazon, Apple (via Digital Book World)
• ‘Significant expansion’ for Nook as Microsoft invests $300m (via The Bookseller)

• Microsoft to Invest in Barnes & Noble’s Nook (via WSJ)

Conference Call

Filed under: Management and Leadership, Publishing, Roundup