Best Buy has now purchased Napster for $121 million, an all-cash deal that values the company at $2.65 per share.
The buyout, confirmed Monday morning, gives Best Buy a digital store to complement its hardware footprint. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions,” said Dave Morrish, executive vice president at Best Buy.
The per-share valuation essentially doubles the price from Friday, part of a relatively unenthusiastic response from Wall Street. Napster board members approved the move, though the exit appears more of a relief than a bonanza. The purchase includes Napster’s cash holdings of $67 million, an account that has been eroding over the past few years. Currently, Napster carries a subscriber base of roughly 700,000, and the company now offers MP3s on the download side.
At the bell on Friday, shares closed at $1.36, and shares bumped upward to $2.52 on Monday. NAPS has dropped nearly 57 percent over the past year, and nearly 62 percent over the past two years. Napster lost $16.5 million on revenues of $127.5 million for the fiscal year ending March 31st. The deal is expected to close during the current quarter.