Rakuten, owner of Kobo, acquires OverDrive
Acquisition gives the Tokyo-based company a major foothold in the U.S. library eBook distribution business, as well as somewhat consolidating the eBook retail business
The owner of the eBook service Kobo, Rakuten, Inc., today announced that it had acquired OverDrive, the Cleveland-based digital distributor of eBooks, audiobooks, and other media in a $410 million cash deal.
The deal gives the Tokyo-based company a major foothold in the library distribution business, and eliminates another competitor to its own service, which has failed so far to get much of a foothold in the U.S. Kobo Books, before its acquisition by Rakuten in 2012, was once associated with Borders – before the demise of the bookseller in 2011.
“OverDrive is a widely-respected pioneer in digital content and the sharing economy. Long before even Kobo emerged onto the global stage, OverDrive had already seen the future and was working with publishers to digitize their content to share with the world, building one of the most comprehensive online digital marketplaces in the process,” said Takahito Aiki, Head of Rakuten’s global eBook business in the company’s announcement. “OverDrive’s deep content library and relationships with publishers, libraries, schools, and retailers will allow Rakuten to extend our mission of empowerment to new market segments and accelerate the growth of our digital contents businesses.”
According to Rakuten, the acquisition of OverDrive adds more than 2.5 million titles, and relationships with 5,000 publishers and 30,000 libraries. OverDrive’s EBITDA, the announcement said, was $25 million in 2014, and with the addition of OverDrive, Rakuten expects the EBITDA of its global eBook business to be breakeven in 2015.