Japanese giant Rakuten to buy Indigo’s majority stake in Kobo for close to $150 million
Turns out we aren’t the only ones who love Kobo: news broke yesterday that the e-reader company is soon to be scooped up by Japanese behemoth Rakuten. The e-commerce company, one of the world’s top three by revenue, is buying the Toronto-based company for $315 million; Indigo, the largest shareholder, will see around $140 to $150 million. But why sell one of Canada’s bigger success stories? According to Indigo CEO and Kobo chair Heather Reisman, Indigo simply doesn’t have the cash to support Kobo going forward (Reisman’s personal wealth notwithstanding). “Over the next year, this business will need in excess of $100 million to take it to where this industry is going,” she told Canadian Business. “We just cannot play in that league for that amount of capital.” Kobo CEO Michael Serbinis agreed. “We’re dealing with Amazon [and] Apple, and if that weren’t enough, Google is interested in [the e-reading market],” he said. “We’ve always been competing with goliaths, and now we’ve got a goliath backstopping us…With Rakuten at our side and at our back, I see Kobo becoming a multi-billion-dollar company.” Read the entire story [Quill and Quire] »
One thought on “Japanese giant Rakuten to buy Indigo’s majority stake in Kobo for close to $150 million”
Do I feel the sense of death looming over Indigo? Selling off the most profitable part of their business as book declines accelerate seems to be a strange decision.
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