From PR Newswire:
OverDrive, the leading digital reading platform for libraries and schools, announced today that it is acquiring the assets of RBmedia’s library business, including the RBdigital platform in North America, the United Kingdom and Australia.
The acquisition of RBdigital will bring enhanced content and features to the OverDrive platform, enabling it to better serve the needs of libraries around the world, including access to new release Recorded Books audiobooks. Moreover, OverDrive will be exploring the addition of popular RBdigital services like digital magazines from ZINIO to the OverDrive platform. As the owner of both RBmedia and OverDrive, KKR is uniquely positioned to facilitate this transaction and help bring libraries the best solutions possible.
“Combining the RBdigital library business with OverDrive’s industry-leading technologies will greatly benefit libraries and their readers worldwide,” said Steve Potash, founder and CEO of OverDrive. “We’re proud to enhance our value proposition for libraries by delighting readers with this new content on the award-winning Libby and Sora reading apps.”
. . . .
The terms of the acquisition were not announced.
Link to the rest at PR Newswire and thanks to DaveMich for the tip.
PG notes the typical/classic PR release style and format of the OP which may or may not indicate that it was drafted quickly. Or simply designed not to make a big splash.
PG doesn’t know if this was a good price for the sellers or a good price for the buyers. He doubts it can be both.
This announcement has certainly attracted immediate attention from Amazon executives, whether they are sheltering in place or not.
Is the acquisition calculated to combine the capabilities of the two companies so they can squeeze more money out of public libraries? PG doubts this could be a strategy because libraries are not sitting on any sorts of cash troves that can be plundered. Indeed, he understands that many libraries have laid off staff during the last few months.
Particularly during the extended period of time following COVID when average personal incomes are dropping from coast-to-coast, PG suspects only a politician with a death-wish would support taking money out of a much-reduced municipal or state budget to allow libraries to pay higher fees to KKR.
Sometimes, venture capital/private equity, etc., organizations acquire an asset with a view to fluffing it up financially, then selling it to a willing buyer. On occasion, such organizations make long-term investments (or act on behalf of a shy long-term investor that/who desires to remain behind the scenes) with the idea of increasing the value of the acquired business over several years by providing needed capital, installing better management, etc., then selling pieces of the company to others, sometimes privately or sometimes via a program of either taking a private company public or adding substantial value to an already public company, then issuing and selling more shares.
PG doesn’t think Amazon is in this particular business – providing ebooks and digital audio books to libraries – or contemplating getting into this business. He suspects Amazon has reached a position where any major acquisition or other move into a market segment related to its current book business would attract a lot of undesired attention from antitrust agencies.
Besides, even if it dominate the business of selling/licensing ebooks to readers, PG doubts major commercial publishers would willingly cooperate in permitting Amazon to take over the library market for ebooks.
One prediction PG is confident in making is that the combined businesses that will likely result from this acquisition will not need two Vice Presidents of Information Systems, Marketing, Human Resources, etc. On top of COVID, PG suspects, employees of Overdrive and RBmedia are extremely nervous these days.
This sounds more like a reorganisation to me.
RBMedia was sold to KKR (Kohlberg Kravis Roberts) in July 2018 and Overdrive was recently bought by KKR (from Rakuten), with the deal completing in June 2020. I assume that KKR is moving units between subsidiaries now it has control (and eliminating duplication/things it really didn’t want, so job worries are no doubt justified).
I would suggest it may be worth considering Overdrive’s *other* ebook business, the one that isn’t about libraries but about setting up “white label” ADEPT ebookstores. They were supplying books to these stores *before* there was a Kindle and technically never stopped.
Given that nobody else is giving Amazon a meaningful challenge, they might be gearing up to open up an ebookstore of their own through their existing app.
Thanks for pointing that out, Felix.
While I’ve been an Amazon fan for awhile, I think it’s always good for a vendor to have competition.
There was a thing a few years ago where, for some reason, many overdrive books were not available in their Kindle edition, only in the overdrive edition that must be read using the app. Patrons were up in arms until it was sorted out, with major apologies all around. I’m sure that the folks there know very well how often their library lends are fulfilled via Amazon — by customer choice — and I’ll bet it gives them serious pause.