December 25, 2019
  • RAKUTEN, INC.

Announcement of Agreement Regarding Transfer of All Shares of OverDrive Holdings, Inc.

 

 Rakuten, Inc. (Chairman and CEO: Hiroshi Mikitani, hereinafter “the Company”) announces that today Rakuten USA, Inc., a wholly-owned, direct subsidiary of the Company (hereinafter the “Seller”) has concluded a stock purchase agreement (hereinafter the “Agreement”) with Aragorn Parent Corporation (Representative: Richard Sarnoff, hereinafter the “Purchaser”) under which all shares of OverDrive Holdings, Inc. (hereinafter “OverDrive Holdings” and, together with its subsidiaries, “OverDrive”) indirectly held by the Company and directly held by the Seller will be sold and transferred to the Purchaser.

1. Purpose and background of the Agreement
 Since its establishment in 1986, OverDrive has provided eBooks and audio books to libraries and educational institutions, and has steadily expanded its business results since joining the Rakuten Group. We decided on a transfer of the shares in consideration of optimizing the allocation of Rakuten Group resources.

 
2. Overview of the consolidated subsidiary to be transferred

(1)

Company name

OverDrive Holdings, Inc.

(2)

Headquarter

One OverDrive Way

Cleveland, OH 44125 USA

(3)

Representative

President and CEO Steve Potash

(4)

Date of establishment

July 23, 1986

(5)

Capital stock

USD 1 (As of September 30, 2019)

(6)

Number of employees

359 (As of November 30, 2019)

(7)

Business

Distribution of digital eBooks, audiobooks and magazines for library and schools

(8)

Relationship between the Company and OverDrive Holdings

Capital

100% owned by Rakuten USA, Inc. which is a wholly-owned subsidiary of the Company

Personnel

Four executive officers of the Company joined OverDrive Holdings as directors. An executive officer of the Company joined OverDrive Holdings as a director, President & CEO.

Business

There is no highly important operational relationship

(9)

Financial Position and Performance in

the Past 3 Fiscal Years

The Company refrains from disclosing

at the request of transferee

 

3. Overview of the Purchaser

(1)

Company name

Aragorn Parent Corporation

(2)

Headquarter

c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th Street, Suite 4200, New York, New York 10019 USA

(3)

Representative

Richard Sarnoff

(4)

Date of establishment

December 19, 2019

(5)

Purpose of establishment

Holding company formed for the purpose of acquiring OverDrive

(6)

Overview of fund manager

Company name

Kohlberg Kravis Roberts & Co. L.P.

Headquarter

9 West 57th Street, Suite 4200

New York, New York 10019 USA

Representative

Co-Chairmen and Co-CEOs 

Henry R. Kravis, George R. Roberts

Business

Management of multiple alternative asset classes, including private equity, energy, infrastructure and real estate.

(7)

Relationship between the Company and Purchaser

Relationship between the Company and Purchaser

None

Relationship between the Company and fund manager

None

*Total investment amount, investors, investment ratio, overview of investors and capital stock of fund manager are not to be disclosed at the request of transferee.

 
4. The number of shares to be transferred and shareholding status before and after the transfer

(1)

Number of shares held before the transfer

100 shares

(Number of voting rights: 100, holding ratio: 100%)

(2)

Number of shares to be transferred

100 shares

(Number of voting rights: 100)

(3)

Number of shares held after the transfer

0 shares

(Number of voting rights: 0, holding ratio: 0%)

*Transfer price is not to be disclosed at the agreement with transferee. The price has been determined rationally by mutual agreement of both parties.


5. Schedule

(1)

Date of conclusion of the agreement

December 24th, 2019 (EST)

December 25th, 2019 (JST)

(2)

Date of the transfer of the shares

End of January 2020 (Planned)

 

 6. Impact on business performance
 The company will separately announce the gain from sales of shares in OverDrive once it is determined following the completion of the calculation of the carrying amount of OverDrive on a consolidated basis book value as of the time of sale. However, the Company currently expects to record around a JPY 40 billion gain in FY2020 Q1.
 *The estimated gain is calculated based on the consolidated basis book value at FY2019 Q3.

*Please note that the information contained in press releases is current as of the date of release.

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